On Friday September 23rd 2022, chancellor Kwasi Kwarteng announced that the plans to increase the duty on alcohol (spirits, beer, cider, and wine) will be canceled. This news comes as part of an overall mini-budget which is an economic policy announcement by the new prime minister Liz Truss which aims to tackle the cost of living crisis in the UK. The announcement includes cuts to income tax and stamp duty, and the cancellation of a planned rise in corporation tax.
“At this difficult time, we are not going to let alcohol duty rates rise in line with RPI. So I can announce that the planned increases in the duty rates for beer, for cider, for wine, and for spirits will all be canceled.” ~ Mr Kwasi Kwarteng, Chancellor of the Exchequer
This news was welcomed by the whole drinks industry as it will save consumers £1.35 on the average priced bottle of Scotch whisky as well as help deal with the logistics and supply chain challenges facing the industry. The Scotch Whisky Association (SWA) expressed their gratitude as they had been working with the government on reducing the 70 per cent tax burden on Scotch whisky in the UK, which is one of the highest in the world.
“On behalf of the SWA’s members, I want to thank the government for listening to the concerns of the industry and taking action to support Scotch. The duty freeze will not only support our sector, but the hospitality industry and the wider economy.” ~ Mark Kent, Chief Executive, Scotch Whisky Association
The Office of Budget Responsibility had predicted that the Government would raise £12.7 billion in 2022/23 from the tax paid on alcohol. Thankfully the freeze on alcohol duty from February 2023 was announced. This comes after the previous chancellor, Rishi Sunk announced a duty freeze for the drinks industry in his October 2021 budget which would make this the longest freeze on the tax for 25 years.
