Supermarket shoppers buying bottles of wine are being warned to brace for extra charges in weeks under new rules.
A new waste packaging tax to fund recycling fees will come into effect in April, pushing up the price of many products including beer, wine and spirits.
The Wine and Spirit Trade Association (WSTA) has warned that the fees will add an additional cost of 12p for a bottle of wine and 18p for a bottle of spirits. This comes on top of a hike to alcohol prices from this month as an increase in tax and duties takes effect.
The alcohol tax will rise in line with the Retail Price Index at 3.6%, but a new system to tax wines and spirits based on strength is also being introduced at the same time. It means that the duty on a bottle of gin will go up by 32p, while wine at 14.5% ABV (alcohol by volume) will rise by 54p.
The hikes to duty on wine and spirits follow previous increases in August 2023 – the largest in almost 50 years – adding 20% to excise duty on more than 85% of all wines on the UK market, and more than 10% to duty paid on full strength spirits.
Alcohol duty is paid by manufacturers when they make their products but this is generally then passed onto customers, although product price hikes are at their discretion.
The WSTA says there are “no winners under the UK’s punishing alcohol tax regime” as higher duty rates can result in less sales, which means less money to the Exchequer.
And with new taxes on waste packaging soon to follow in April, shoppers are being warned to brace for higher costs on their drinks.
WSTA chief executive Miles Beale said: “The Government continues to claim that the tax hikes are part of their big plan to plug the black hole in the public finances, but a series of record-breaking tax levies are doing the exact opposite.
“There are no winners under the UK’s punishing alcohol tax regime – higher duty rates mean people buy less which results in reduced income to the Exchequer, businesses are being squeezed and consumers have to pay more.”
He added: “Unfortunately, the pain of price hikes for consumers won’t stop there as new taxes on waste packaging are coming round the corner.
“This seemingly never-ending assault on wines and spirit businesses mean consumers need to brace themselves to pay substantially more for their favourite products.”