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July 21, 2022

UK government delays legislation on alcohol-duty reform

The planned changes were first announced in autumn 2021.

By James Beeson

No legislation on the future of alcohol duty legislation in the UK will be published until autumn, the country’s government has announced.

The reforms – which had previously been announced in the Autumn budget in 2021 – are still yet to come into force. Primary draft legislation had been due to be published this summer to meet the Government’s timetable of delivering the changes by 1 February 2023.

However, in a written statement in the House of Commons on Wednesday (20 July), the Treasury’s financial secretary Lucy Frazer confirmed that the Government was still considering feedback on the proposals.

“At Autumn Budget 2021, the Government’s plans for alcohol duty reform were announced and a consultation on the detail of those planned reforms was published,” she said. “The consultation closed on 30 January 2022. The Government is considering the feedback received and will respond in the autumn”

Among the changes due to be implemented are: a simplification of the UK’s duty system to take drinks in proportion to their alcohol content, as well as a proposal to abolish the 28% duty premium on sparkling wines and the introduction of a lower ‘draught duty rate’ for beer and cider sold on tap in the on-premise.

With the Government now not planning to publish draft legislation before autumn, however, the timetable to implement the new reforms appears to be at risk.

Industry frustration over alcohol duty reform delay

Industry bodies have reacted with frustration to the announcement. UK Hospitality CEO Kate Nicholls described the move as “incredibly disappointing for pubs and hospitality”.

“With the sector and its customers facing soaring costs, we needed to see positive action on lower duty rates for draught beer and cider,” she said. “The new Government must make this legislation, which is already agreed policy, a priority in early September so we can deliver benefits to pubs, the wider hospitality sector and, crucially, consumers.”

The Society of Independent Brewers added that small brewers and pubs had been “left in limbo” over the delay and needed clarity as they made decisions about the future of their businesses.

“This delay puts the Government’s timetable for implementation at risk, leaving little time to consult on changes to legislation in the autumn,” the organisation’s chair, Roy Allkin, said. “Many small and independent brewers have already made business decisions for next year that rely on these widespread changes to duty being introduced on time and any delay will create further uncertainty.

“Small brewers and pubs have been left in limbo at a time when businesses need support as they have to deal with a multitude of supply constraints and the cost of living crisis. We call on the government to commit to achieving the changes in February next year and ensuring that community pubs and independent brewers will be able to benefit from the new draught duty rate as soon as possible.”

The Wine and Spirit Trade Association (WSTA), however, welcomed the move.

“The Government’s plans to delay responding to the alcohol duty review until the Autumn is a welcome and sensible pause,” CEO Miles Beale said. “We look forward to engaging with the new Chancellor and their Treasury team to ensure that plans for changing alcohol tax are fairer, simpler and are delivered with less red tape. 

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