A pub landlord criticizes Rachel Reeves for a tax hike harming the industry, urging government support to ease financial pressures on businesses.
Kent: A pub landlord is upset with Rachel Reeves. He says her tax hike is hurting the pub industry. Marc Bridgen runs The Dog at Wingham. He feels the new alcohol tax is just another cost for his business.
Bridgen won’t pass these costs to customers. He’s already struggling to attract patrons. Absorbing the tax hike will make things tougher for him. He stated, “The costs are killing us.”
He also mentioned rising National Insurance contributions. These increases will be “really crippling” for pubs. Bridgen wants the government to lower VAT on soft drinks, food, and accommodation. This could help hospitality businesses survive.
The alcohol tax will rise by 3.6%, in line with the Retail Price Index. A new system will tax wines and spirits based on their strength. For example, gin will cost 32p more, and wine at 14.5% ABV will increase by 54p.
These changes took effect on August 1, 2023. The Conservative government offered a temporary reprieve for some wines. Wines with 11.5% to 14.5% ABV will be taxed at a flat rate of 12.5%.
The Wine and Spirit Trade Association (WSTA) warns of further costs. A 14.5% ABV bottle of red wine could rise by 98p in 18 months. New waste packaging recycling fees will add 12p for wine and 18p for spirits.
However, there’s a small relief for drinkers. Duty on draught products will drop by 1.7%. This means a penny off a pint in pubs.
These latest duty hikes follow significant increases in August 2023. They were the largest in nearly 50 years, raising excise duty on most wines by 20% and spirits by over 10%.
Alcohol duty is paid by manufacturers when they produce their products. Generally, spirits and wines face higher taxes than ciders and beer due to their stronger alcohol content.
Manufacturers usually pass these costs to consumers. However, they can decide how much to increase prices.
HMRC reports that alcohol tax receipts fell by £209 million in the last financial year. WSTA Chief Executive Miles Beale criticized the government’s tax hikes. He believes they hurt businesses and consumers alike.
Beale added that new taxes on waste packaging will further increase prices. Consumers should prepare to pay more for their favorite drinks.
Hal Wilson, co-founder of Cambridge Wine Merchants, expressed frustration. He sells over 2,000 wines each year. Starting in February, he must know the exact ABV of each wine to calculate costs.
Each 0.1% ABV difference means different taxes. His wines range from 8.5% to 22% ABV. This complicated process is unnecessary if taxes weren’t so high.
Exchequer Secretary to the Treasury James Murray emphasized the importance of pubs. He mentioned draught relief and support for small brewers to help the sector grow.
Richard Naisby, Chairman of the Society of Independent Brewers, noted the benefits of draught relief. It offers lower alcohol duty for community pubs compared to supermarkets. This should encourage more people to support local businesses.
