Alcohol Duty Reform

East Anglia has a long history of alcohol production, the many ‘Maltings’ and ‘Oast Houses’ still being a key feature of the landscape.?It also has lots of pubs, with Norwich being fifth in the list of UK cities with the highest concentration of pubs per square mile.

The biggest alcohol duty reform in 140 years comes into force on 1 August 2023. This will impact on the many alcohol producers, retailers and consumers in our region.

The changes see a move from the five duties that have been in place, based on the type of product, to standardised tax bands based on alcohol by volume (ABV).?There is also a new Small Producer Relief, that will replace the Small Brewers Relief.

Small Producer Relief

From 1 August, any small business in the UK that produces alcoholic products with an ABV less than 8.5 per cent should be eligible for reduced rates on qualifying products, if they produce less than 4,500 hectolitres a year.

Small Producer Relief is applied the products made in the previous production year (1 February to 31 January), providing less than half of the total alcohol produced is made under licence.

Draught Relief

Draught products are classed as those that are packaged in containers of at least 20 litres and designed to connect to a qualifying dispense system. Draught relief offers a reduced rate for these alcoholic drinks that are under 8.5% ABV.

The reduced rate that can be claimed depends on the type and strength of the alcoholic product made.

This relief should mean that wine-based, spirit and other products in on-trade premises pay less duty than in supermarkets.

Henry Pettitt , Partner at Stephenson Smart, commented: “The Alcohol Duty reform applies to all individuals and businesses involved in the manufacture, distribution, holding and sale of alcoholic products across the UK.

They are reflective of a change in alcoholic products and consumer tastes and aim to be simpler, fairer and aim to encourage the growth of health-conscious consumption.

It is encouraging to see a modernisation of an element of the tax system that should aid small producers in our county.”

However, those in the industry, including Jessie Scott, Sales Director at VC Vintners Ltd in Great Yarmouth, feel that the timing of the reform could have been better thought out, with summer being one of the busiest times of year.

“The timing of this increase is mindless and shows disregard for suppliers to the hospitality industry, and the hospitality industry as a whole, as it is in one of the busiest times of the year for the trade and will involve time and costs in reviewing wine lists and bar tariffs.

However, bringing in a reduced rate for the hospitality industry with draught products and raising duty on packaged items in supermarkets will hopefully bring about more people using pubs and restaurants - but the duty reform on wines is a bitter pill to swallow - an increase in duty from 11.5 per cent to 14.5 per cent will be 44p per bottle, staggering!?

Where we do welcome any reform that is going to bring the hospitality business up off its knees and bring more customers into restaurants, pubs, community & social clubs and other venues, a further reduction on duty to the hospitality industry would be beneficial in these particularly hard times.”