Alcohol prices rise as higher duty rates take effect

Alcohol prices increased from Saturday (1) as the government’s planned rise in tax and duties came into effect.

During the Autumn Budget in 2024, the Chancellor of Exchequer announced that from 1st February Alcohol Duty rates on non-draught products will rise in line with the 2nd Quarter 2025 forecasted RPI inflation rate of 3.65 per cent and that the temporary easement of wine alcohol duty bands will also cease.

Retailers selling non-draught products will need to be aware of the following changes:

• 4 per cent alcohol by volume 500ml bottle of non-draught beer will be 2p higher
• 5 per cent alcohol by volume 500ml bottle of non-draught cider will be 1p higher
• A 70cl bottle of 37.5 per cent ABV spirit is set to see its duty increase by £0.30, while a 70cl bottle of 40 per cent ABV spirit is set to see its duty increase by £0.33.

Since the new alcohol duty system came into effect on 1st August 2023, there has been a period of duty easement aimed at making the transition easier for businesses.

During this time, any wine that has an alcoholic strength of at least 11.5 per cent but not exceeding 14.5 per cent has been treated as if it were an alcoholic strength of 12.5 per cent (for the purposes of duty).

This flat tax rate for wines with an alcohol content between 11.5 per cent and 14.5 per cent came to an end on Feb 1.

Retailers selling wine will need to be aware that:

• The end of the wine easement will cause an additional duty-increase for wines 12.5 per cent to 14.5 per cent alcohol by volume, and a decrease for wines 11.5 per cent to 12.4 per cent alcohol by volume.
• The more alcoholic a wine is, the higher the rate of duty is levied.
• The duty rates will not only change according to their ABV but will also increase in line with RPI inflation (3.65 per cent).