Britons are set to see an increase in prices for their preferred alcoholic beverages starting today due to a new tax hike that coincides with the end of Dry January. Alcohol duty has been raised by 3.66%, matching the RPI inflation rate. This adjustment will result in an additional 11p on a bottle of Prosecco with an 11% alcohol by volume (ABV), 14p on a bottle of red wine with a 14.5% ABV, and 38p on a bottle of gin with a 37.5% ABV, as reported by the Wine and Spirit Trade Association (WSTA).

The decision to increase the duty was made last year during the Autumn Budget. Industry leaders in the wine and spirits sector have expressed concerns, stating that companies are compelled to raise prices in order to sustain their businesses.

In the previous year, consumers faced a 3.6% upsurge in alcohol duty, resulting in an additional 54p on a bottle of wine and 32p on gin, while draught duty saw a reduction of 1.7%, equivalent to a penny off a pint.

Furthermore, a new tax system was introduced that bases the duty on the strength of the wine. WSTA highlighted that the tax on a bottle of 14.5% red wine has surged by £1.10 since the revised alcohol duty structure was implemented in August 2023.

Alcohol duties are influenced by the potency of beverages. Some beer brands, such as Foster’s, Carlsberg, Coors Light, and Sol, have lowered their alcohol content in recent months to cut costs.

Emma McClarkin, the chief executive of the British Beer and Pub Association, expressed concerns about the potential for additional price increases, emphasizing the strain it would place on brewers and publicans. Miles Beale, chief executive of WSTA, noted that the evolving price structures, particularly for wine taxed by strength, would lead to more administrative challenges for the wine and spirit sector.

The Treasury defended the tax hike, stating that alcohol duty plays a crucial role in maintaining fair public finances that support essential services. The WSTA provided a breakdown of the price changes before and after the alcohol duty increase for various drinks.