Champagne and prosecco to become cheaper but cost of higher-alcohol drinks to rise

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Champagne and prosecco to become cheaper but cost of higher-alcohol drinks to rise
© Provided by The Independent

Fans of sparkling wine, champagne and prosecco can raise a glass after the Chancellor revealed that he is reducing duties on them, which will see their tax rates fall.

In his Autumn Budget, Rishi Sunak said that sparkling wines were “no longer the preserve of wealthy elites” and promised to end an “irrational” system that imposes higher duties compared to still wine.

Rose wine and fruit cider, which have lower volumes of alcohol, will also become cheaper.

However, the overhaul in alcohol duties means that more alcoholic drinks will face higher tax rates. This means that still wines like malbec, merlot and sauvignon blanc will cost more, with fortified wines like sherry and port facing the steepest increases.

The duty change will see the price of a 75cl bottle of Hardy’s VR merlot, which currently costs £7, go up by around five per cent, with a tax hike of 35p.

But an £8.50 bottle of Canti prosecco will see its tax reduced by 87p under the new system.

Spirits with an alcohol content of 40 per cent will remain unchanged, but the cost of weaker spirits, such as Baileys with an alcohol content of 17 per cent, will go down.

Beer drinkers will also have reason to raise a pint, as the tax rate for beers will drop and brewers are expecting lower duty in both retail stores and pubs as a result of the new “draught relief”.

Sunak said: “Our new system will be designed around a commonsense principle: the stronger the drink, the higher the rate.

“This means that some drinks, like stronger red wines, fortified wines or high-strength ‘white ciders’ will see a small increase in their rates because they are currently undertaxed, given their strength.

“That’s the right thing to do, and it will help end the era of cheap, high-strength drinks which can harm public health and enable problem drinking.”

“White cider” drinks refer to high-alcohol drinks such as White Ace, Carbon White and White Star. Cans of these drinks sometimes sell for as little as 59p, and have been condemned as “heroin” for alcoholics due to its high strength and cheap cost.

In 2017, former chancellor Philip Hammond pledged to increase taxes on white ciders from 2019 to tackle “excessive consumption by the most vulnerable people”.

The increase in alcohol duties will not come into force until February 2023.

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