Beer, wine and liquor taxes will not go up, the UK government has announced in a reversal of the decision from earlier this year to raise the alcohol duty. In March, Chancellor Hunt had announced the end of a blanket alcohol duty freeze on August 1, 2023. Then, alcohol duties would rise in line with inflation in the usual way. But now the alcohol duty has been frozen until August 1, 2024, the chancellor has announced, as per BBC reporting.
Delivering his Autumn Statement in the Commons, Jeremy Hunt said that meant there would be no increase in duty on beer, cider, wine or spirits.
But the UK is taking measures to increase the price of tobacco. One measure increases the duty rate on all tobacco products by the Tobacco Duty escalator of 2% above the Retail Price Index (RPI) inflation. The duty rate for hand-rolling tobacco will also rise by an additional 10% to 12% above RPI inflation, according to the government.
The Treasury estimates the cost of the alcohol duty freeze at £310m.
The decision is a gift to the alcohol industry and jeopardizes health and well-being of poeple and communities, as it stops what would have been a meaningful rise in alcohol taxation, following decades of alcohol becoming cheaper in the UK.
The alcohol taxation improvements Mr Hunt had announced in March could have meant a 20% increase in alcohol taxation.
Using alcohol taxation to make alcohol less affordable is a proven alcohol policy solution recommended by the World Health Organization (WHO). Raising alcohol taxes is highly effective in protecting people from alcohol harms, preventing the onset of alcohol use among children and youth, and generating additional revenue that can be re-invested in the healthcare system.
This triple-win effect of alcohol taxation is urgently needed in the UK. Alcohol deaths are rising, other alcohol harms are also increasing and are placing a heavy burden on people, communities, society at large and the economy. The British healthcare system, the NHS, is seriously struggling to cope with magnitude of alcohol harm.
But Big Alcohol has continuously lobbied against the alcohol taxation improvements, as The Drinks Business admits.
Big Alcohol lobbying against the public interest
The Wine and Spirit Trade Association (WSTA), the Wine Society, and the Scotch Whisky Association (SWA) – some of Big Alcohol’s most dominant front groups in the UK – joined forces with some of the UK’s largest alcohol producers, to pressure Mr Hunt to change course.
The alcohol industry presented biased data suggesting the treasury would loose revenue due to the negative impact on alcohol sales from alcohol duty increases. But they ignored the vast amount of costs alcohol harm is causing UK society and they failed to address world class science showing that carefully crafted alcohol tax increases help raise revenue while they reduce per capita alcohol use.
The alcohol lobby pointed to recent sales figures since the August duty rise which revealed off-trade sales had dropped by around 20% in the liquor category in the last 28 days, and a double digit drop for wine in the same period. Such declines are positive because liquor and wine are often high-strength alcohol products.
It now appears, as The Drinks Business writes, that Chancellor Hunt has listened to the Big Alcohol. He even mentioned the work of the SWA and others on lobbying for the duty freeze in his statement.
Flawed discourse that ignores people’s preferences
It is clear that the UK government is bowing to alcohol industry pressure instead of fullfilling their obligation to protect the public from alcohol harm with the help of proven and impactful alcohol policy solutions, especially alcohol tax increases.
Analysis of the public discourse about the autumn statement also reveals that the media is largely failing to cover the issue in an evidence-based way and informed by the real concerns of the British people. Most media reporting, including that of the BBC, only promotes the alcohol industry position on the alcohol tax in the UK, while civil society and communities’ concerns are completely absent.
This is noteworthy because a YouGov survey revealed that more people think cutting the alcohol tax was a good idea than the people who support the decision.
47% of the public say cutting the alcohol tax is the wrong priority. Only 38% think it was a good idea.
This shows that the media as well as the government are promoting ideas that are unpopular with the British people, but that cater to the narrow profit interests of the alcohol industry.
Alcohol harm in the UK
Alcohol is the number one risk factor in death, ill-health and disability amongst the working age population in Britain. And more alcohol harm means lower economic growth due to ill health and under-employment. Alcohol is behind a very significant proportion of the people who are not working due to long-term ill health.
The UK is currently facing a serious crisis in alcohol harm. The number of alcohol deaths increased massively during the COVID-19 restrictions and deaths are remaining at historically high levels.
Ensuring that alcohol is more expensive is one of the simplest and most effective solutions.
In January, Movendi International reported about analysis from Oxford University scientists Professor Carl Heneghan and Dr Tom Jefferson that revealed an increase in alcohol-related disease in the UK after the coronavirus pandemic.
In November 2022, a broad coalition had already called on the UK government to conduct an Independent Review on Alcohol Harm to inform a new national Alcohol Strategy.
Improved alcohol policy solutions are urgently needed in the UK to tackle the increasing burden of alcohol harm which is affecting families, communities, and especially children in the UK.
The Coalition highlighted the harm caused by the products and practices of the alcohol industry and the lack of a government strategy to tackle this burden since 2012.
In the UK,
- Alcohol is the leading risk factor for death, ill-health, and disability amongst 15-49-year-olds.
- Alcohol causes more working years of life lost than the ten most common cancers combined.
- The COVID-19 pandemic has exacerbated alcohol harm leading to alcohol deaths reaching an all-time high.
- Deprived communities are disproportionately affected by alcohol harm, despite consuming less.
- The estimated cost of alcohol harm to UK society is at least £27 billion every year.
- Less than half is offset by tax revenue from alcohol.
Previously, two modeling studies from England highlighted the need for urgent alcohol policy action by the UK government to prevent alcohol-caused ill-health, save lives and save money for the National Health Services (NHS). According to both reports, the increase in alcohol use, during the COVID-19 pandemic by those who use alcohol heavily, could lead to the alcohol burden increasing exponentially in the coming years.