Beer tax has been cut, but spirits, wine and cider duty has been hiked

Beer tax has been cut, but spirits, wine and cider duty has been hiked

The UK Government has announced a cut in beer tax and scrapped the duty escalator on the category in its annual Budget. 

Chancellor George Osborne revealed the surprise moves in his speech in Parliament today (20 March). The GBP0.01 duty cut will lower the price of a pint by an "estimated" GBP0.04 (US$0.06).

Meanwhile, the abandonment of the escalator on beer will be welcomed by the industry after a sustained campaign againt the measure. The policy has seen alcohol taxes raised by 2% above inflation since it was introduced in 2008. It was due to stay in place until 2014-15. 

Osborne flagged the changes were being done to help pubs. "The sad fact is that we’ve lost 10,000 pubs in the UK over the last decade," he told the House of Commons.

However, planned duty increases on other drinks categories through the escalator will remain in place, Osborne said. Subsequently the price of a bottle of wine will rise by around GBP0.10, while a bottle of spirits will cost an estimated GBP0.38 more.

The measures take effect from Monday (25 March). 

Osborne did not directly mention minimum pricing in his speech, after rumours last week the government has scrapped its plans. Official Treasury documents on the Budget said that the government will "shortly respond" to its alcohol consultation, with "proposals to deal with deeply-discounted alcohol in supermarkets and other stores". 

Check just-drinks later for all the industry reaction to today's Budget.