Pub Boss Warns Budget Alcohol Duty Rise Could Add Up To 25p To A Pint

A pub operator whose venue sits in the Chancellor’s own constituency has warned that this week’s rise in alcohol duty could add as much as 25p to the price of a pint.

Joe Harper, whose Harper Inns group runs the Earl of Stafford in John Healey’s patch, criticised the Budget decision to raise alcohol duty by a record 4.5% from February.

Speaking to The Telegraph, Harper said a 5p duty increase on the operator’s side translates to between 20p and 25p by the time it reaches the bar. He likened the pressure to the post-Covid price rises driven by the energy shock after Russia’s invasion of Ukraine, and said such increases were impossible to justify to customers.

The Chancellor also confirmed a 3.9% rise in the National Minimum Wage, lifting the hourly rate from £12.71 to £13.21. The move is likely to weigh heavily on hospitality, where a large share of staff are paid at or close to the minimum.

Harper estimated the wage rise alone would add £70,000 a year to his group’s costs. He invited the Chancellor to join him for a pint at the Earl of Stafford so he could set out his views in person.

The Budget did include some support for the sector. The Government said it would provide £10m of duty relief for more than 2,000 small brewers. However, operators say it does little to offset the wider cost increases facing pubs.

Chris Jowsey, chief executive of Admiral Taverns, which has around 1,400 pubs, said he would not be surprised to see beer prices rise by roughly 20p over the next six months.
Simon Dodd, chief executive of Young’s, confirmed the pub company would pass on the increase. He said Young’s plans to raise prices next year in line with duty, decided pub by pub.

Alcohol duty is usually uprated each year in line with RPI inflation, both to raise revenue and to discourage excessive drinking. The new rate takes effect on 1 February 2027. Last year, then-Chancellor Rachel Reeves raised duty by 3.66%.

Pubs and industry campaigners had lobbied for a freeze, arguing that struggling venues needed relief.

Miles Beale, Chief Executive of the Wine and Spirit Trade Association, said: “It’s a breath-taking hike. No-one will be toasting this record breaking 4.55% RPI increase on top of rising inflation – most of all British consumers who will be paying for this. Instead of providing breathing space in a cost of living crisis the Chancellor’s alcohol tax hikes will further suffocate British business and serve up nothing for consumers.

The only way to give families and businesses some support in an economic crisis is to stop the hikes, look at the numbers and listen to those being impacted. The old tactics are not working for anyone. Increasing alcohol duty is not boosting Treasury funds, but it is closing down businesses and pricing consumers out of a bit of joy in their shopping basket.

If Government is serious about providing growth in every postcode it has stop piling on the pain for businesses and consumers across the country and show its support to the UK drinks sector. ”

The impact of the largest alcohol tax hike for 50 years, has meant wine volumes sales are down 8% since 2023 and spirit volumes down 15%.**

With RPI set at 4.55% tax will go up by 14p on a bottle of Prosecco, 18p on a bottle of 14.5% abv red wine and 49p for a bottle of gin, from 1 February next year.

When the duty increases kick in tax on a bottle of 14.5% red wine will have gone up by £1.50 (56%), port will have gone up by £2.19 (61%) and a bottle of gin will have risen by £2.15 (25%) in the three and half years since the introduction of the UK’s new alcohol taxation system in August 2023.