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Examples below indicate duty increase (dependent on ABV)
On Wednesday 30th October 2024, the government announced measures related to alcohol duty rates to go live on the 1st February 2025.
KEY POINTS
• On 1st February 2025, alcohol duty on non-draught products will increase in-line with the 2nd quarter 2025 forecasted RPI inflation rate of 3.65%.
• The temporary easement of wine alcohol duty bands will cease on 1st February 2025
WHAT WAS THE REASON FOR THE NEW DUTY TAX BANDS?
On 1st August 2023 a new alcohol duty legislation went live.
This was the first increase in Alcohol duty in the UK since February 2019.
1) What was the 2023 legislation?
To standardise the alcohol duty bands across all types of alcoholic products, (beer, spirits, cider, still and sparkling wines, as well as other fermented beverages), with all tax rates calculated based on the litres of pure alcohol in the product, applied from 0.1% upwards.
2) How would it work?
The associated duty rate would be used to calculate different tax charges for each 0.1% ABV increment on the label, which means that a 75cl bottle of wine with an ABV of 11% will incur a different duty tax to one with an ABV of 11.1%.
3) What was the easement provided?
A transitional period, or temporary easement was implemented. This meant that all still and sparkling wines between 11.5% and 14.5% ABV should use an ‘assumed’ strength of 12.5% ABV when calculating duty to reduce confusion.
4) What is the end of easement?
From 1st February 2025, the single amount of duty paid on wines between 11.5-14.5% ABV – £2.67 per 75cl bottle – will be replaced with 30 different payable amounts according to the strength of the wine now declared at 0.1% volume increments.
WHAT DOES THIS MEAN FOR YOU?
On 1st February 2025, alcohol duty will be going up once more, with still and sparkling wines increasing by an average £0.15 per bottle. The upcoming tables provide snapshots of the impact on wines, as well as other alcoholic beverages, taking into account both the RPI increase and the end of the easement.
This duty increase takes effect in-line with when the wine and spirits industry usually releases their new annual price lists for the year ahead.
what are your options ahead of 1st February 2025?
• Apply the duty increase on 1st February and update your prices accordingly ahead of the deadline.
• Build up your stock before January 31st 2025 to delay reviewing prices until March.
• Adjust your offering ahead of 1st February to include more lower alcohol wines, beers and spirits.
HOW CAN DWUK HELP YOU WITH THESE CHANGES?
Your DWUK Account Manager is there to support you as much as possible with this transition and will be able to advise on the best course of action for your business to minimise any disruption.
DWUK are working proactively with our suppliers to explore lower ABV wines and other opportunities that we can put in place to further support you and create value in the lead up to 1st February 2025.
USEFUL LINKS
Please note: the above are third party websites and are for your personal reference only
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