Budget 2023: RPI duty increase is a ‘hammer blow’


CHANCELLOR Jeremy Hunt’s announcement that alcohol duty will increase in line with the Retail Price Index (RPI) is a ‘hammer blow’ for pubs and their customers, according to the boss of Diageo GB.

Announcing his Spring Budget today (15th March), the chancellor said duty on all alcoholic products produced in the UK or imported into the country will increase in line with inflation from August.

Responding to the news Diageo GB boss, Nuno Teles called the announcement ‘a hammer blow’.

“Today’s decision is a hammer blow for pubs, drinkers and for Scotch, a UK homegrown industry supporting tens of thousands of jobs,” said Teles.

“We urge the chancellor to reverse this punitive and inflationary tax hike.”

The Scotch Whisky Association said the increase amounts to ‘one of the largest tax hikes in recent decades’, bringing the duty rate to £31.64 per litre of pure alcohol.

“The largest tax increase for decades means that 75% of the average priced bottle of Scotch whisky will be collected in tax, reducing already tight margins for an industry which employs tens of thousands of people and invests hundreds of millions annually across the UK,” said chief executive Mark Kent.

The news isn’t great for spirits industry workers either, according to union GMB Scotland.

Secretary Louise Gilmour said workers are “facing tough international competition and they are still dealing with the damaging legacy of Trump’s whisky tariffs while Truss and Johnson were sleeping at the wheel”.

“This latest tax increase risks leaving them even further behind,” said Gilmour.

“Whisky and spirits production is the jewel in the crown of Scotland’s world-class food and drinks sector, but the political bubble looks out of touch about its importance not just to the country, but to the workers, communities, and supply-chains that depend on its future growth.”

There was some respite granted to on-trade draught products but here, too, reaction was less than enthusiastic.

From August duty relief for draught products will increase from 5% to 9.2%, but the Society of Independent Brewers said any benefit had been ‘eroded’ by the overall duty increase.