New alcohol duty rules target health harms, ending industry’s free pass

31 October 2024, 13:49

Following years of inaction on alcohol policy, yesterday’s Budget marked a step in the right direction.

One that shifts focus towards improving the nation’s health and prosperity and away from the self-serving interests of the alcohol lobby.

The most notable of three key alcohol-related announcements coming into effect in February 2025 is that non-draught alcohol duty rates will keep pace with inflation. After a decade of real-terms cuts, this will see the country’s total alcohol duty receipts increase from £12.6bn in 2023/24 to almost £16bn by 2029/30.

However, we must recognise the scale of the alcohol ‘problem’. There is a huge gap between what we receive back from alcohol companies in duty and what taxpayers fork out to cover the true cost of alcohol harm, currently estimated to be at least £33bn each year in the UK.

This is two-and-a-half times the revenue generated from our current duty system, and the measures announced this week would only improve this slightly by 2029/30. That’s not considering the real possibility that, without further action to address alcohol harm, this £33bn cost will rise over the same period.

Yesterday also saw duty paid on draught products cut by 1.7% in a bid to support British pubs. This change to duty paid on draught products – which represent 60% of alcoholic drinks sold in pubs – builds on existing mechanisms, entitling them to a lower rate of duty.

It knocks one penny off an average strength pint, helping to level the playing field between pubs and cheaper, non-draught alcohol sold in shops – products that drive higher rates of alcohol harm in our homes and communities.

Finally, The Chancellor confirmed that temporary wine easement – which has kept duty at 12.5% for all wines between 11.5-14.5% ABV – will end as planned, moving to a strength-based model whereby producers of stronger wines that cause more harm pay more duty.

With that in mind, Alcohol Change UK is optimistic that we will see further evidence-based policies on the taxation, cost, availability and marketing of alcohol. This should include reintroducing the duty escalator and bringing in minimum unit pricing, a targeted and proven harm-reduction measure.

Key to this is the Health Mission Board, the Change NHS 10-Year Plan consultation, and the decision on treatment services expected in the Spending Review next Spring.

From low energy and anxiety to high blood pressure and cancer, alcohol harm affects millions of us every day. These measures signal a step-change in the UK's approach to alcohol policy and a growing appreciation of the impact of this major health polluter. In the fine print, the Government stated it has heard calls to increase alcohol duty by more than inflation to tackle increasing alcohol-related deaths, as well as economic inactivity.

We will continue to work with policymakers to drive this change and reduce alcohol harm. The country’s health and prosperity go hand in hand.

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Dr Richard Piper is CEO at Alcohol Change UK

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