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Chancellor to Extend Alcohol Duty Freeze Until August

Planned increases in alcohol duty have pushed back until August 2023, after Jeremy Hunt decided to extend the current freeze a further six months.

A duty freeze was originally proposed by Kwasi Kwarteng during his brief stay in 11 Downing, but this was then reversed by his replacement as chancellor, Jeremy Hunt, in what was described by some in the industry as a “huge blow”. Hunt’s proposals to raise duties, due to come into effect on 1 February, would have seen 7 pence added to the price of beer, 38p on a bottle of wine and more than £1.30 on spirits in early 2023.

However, in a statement made by Hunt yesterday (December 19), he said: “I can inform the House that I have asked the Office for Budget Responsibility (OBR) to prepare a forecast for 15 March 2023 to accompany a Spring Budget.” An announcement from The Treasury specifically about maintaining a duty freeze for a further six months than was originally intended is expected this afternoon.

Emma McClarkin, chief executive of the British Beer and Pub Association said that this freeze “will allow £180million to be reinvested into our sector”.

“Investment in our sector now will pay dividends in villages, towns and cities across the country for generations to come,” she said.

“Pubs and brewers are a crucial thread in the social fabric of our society and contribute not only economically but socially, connecting people in communities up and down the country.”

Richard Naisby, National Chairman The Society of Independent Brewers (SIBA) said:
“Independent breweries play a vital role in the British hospitality industry and are embedded in their local communities, providing jobs and adding greatly to local economies across the UK. The extension of the beer duty freeze will come as welcome news to these vital independent businesses, providing some certainty until the summer. But with breweries facing pressure from every direction and energy costs spiralling we would urge the Government to go further to ensure the number of breweries in the UK doesn’t continue to decline.

“Independent brewers would like to see the new draught beer duty relief increased from 5% to 20% when it is introduced next summer to give our struggling pub industry a shot in the arm, as well as continued support for independent breweries under the energy bill relief scheme.”

The Night Time Industries Association welcomed the move, but said the government must “recognise the full extent of the problem, and consider further support in the coming months for many businesses to survive”.

“The alcohol duty freeze will give businesses some breathing space but will not repair the damage already done or solve the immediate challenges faced by the sector following three years of disruption,” they said.

Nick Mackenzie, Chief executive of Greene King, said:
“The Chancellor’s decision to extend the freeze on alcohol duty is great news for the industry and recognises the vital role that pubs play at the heart of communities.

“This announcement is welcome and will do much to support our pubs and tenants through a challenging winter as the sector continues to face severe cost pressures. However, we urge the Government to keep its promise to modernise the alcohol duty system so it is fairer for pubs and supports lower-strength products. Fundamental reform is long overdue and will open up investment in the sector, enabling pubs to continue to support communities up and down the country.”