Beer: Excise Duties
The question
To ask the Chancellor of the Exchequer, what assessment her Department has made of the potential impact of the 1.7% reduction in Alcohol Duty rates for draught products on the financial viability of pubs.
Answered by James Murray
A Tax Information and Impact Note was published alongside the changes to alcohol duty announced at Autumn Budget. This is available here: Alcohol Duty uprating - GOV.UK
The alcohol duty cut on qualifying draught products impacts approximately 60% of the alcoholic drinks sold in pubs. This represents an overall cut in duty bills of over £85m a year.
Although alcohol duty is paid directly by producers, duty changes are ‘passed-through' to consumers in prices. This link between alcohol duty and prices is widely acknowledged, including by the Office of Budget Responsibility in its inflation forecasts.
The Chancellor also confirmed her intention to introduce permanently lower business rates for high street retail, hospitality, and leisure (RHL) properties with rateable values below £500,000, including pubs, from 2026-27, and in the interim to extend the current RHL relief for one year at 40%, up to a cash cap of £110,000 per business.
There is significant variation in alcohol taxation policy amongst European countries, with some countries having lower alcohol duty rates and some having higher rates.
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