Trade divided over government delays to alcohol duty reform

The drinks industry has responded with mixed reactions to the government’s announcement that alcohol duty reforms will be delayed. 

In October 2021, it was announced that draft legislation for alcohol duty changes would be published in summer 2022 so that reforms could be officially introduced through the 2022/23 Finance Bill. Following the announcement, a consultation period was held until January 30,  2022. 

The proposal was based on a system of higher tax for products with a higher alcohol content.

While the wine and spirits industry has largely contested the reforms due to higher tax rates on “stronger” drinks, the proposed changes would see lower duty rates for draught beer and cider, as well as lower rates for craft producers. 

As the industry geared up to hear the results of the consultation, financial secretary Lucy Frazer announced yesterday (July 20) that the government is currently in the process of “considering the feedback”, and will respond in autumn rather than summer. 

Responding to the announcement, Society of Independent Brewers (SIBA) chair Roy Allkin said: “Independent brewers have been waiting on tenterhooks for the next stages of the alcohol duty changes and are deeply disappointed that we’ll now have to wait until the autumn to know what the final reforms will look like.

“This delay puts the Government’s timetable for implementation at risk, leaving little time to consult on changes to legislation in the autumn. Many small and independent brewers have already made business decisions for next year that rely on these widespread changes to duty being introduced on time and any delay will create further uncertainty.

Emma McClarkin, chief executive of the British Beer & Pub Association (BBPA) described the delays as “extremely disappointing”, adding: “We would urge any new Government to keep these reforms on track to guarantee a reduced rate of draught beer duty that helps Britain’s brewers and pubs and supports lower-strength products as soon as possible.”

However, Miles Beale, chief executive of the Wine and Spirit Trade Association (WSTA), said the delays were a “sensible pause”, and may offer an opportunity to ensure that the reforms are “fairer” and “simpler”. 

“With inflation continuing to climb to its highest rate for 40 years we hope that by working with the new Treasury team we can ensure that this once in a lifetime chance to reform the system does not add to consumer misery and bring with it higher prices and less consumer choice” he added.

 

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