We’re campaigning for a fairer and healthier alcohol duty system.
What is alcohol duty and how does it work?
Alcohol duty (or tax) is paid for by the company that produces or imports the products and is included in the price you pay. This generates revenue for the government.
In August 2023, the government introduced a new duty system that taxes alcohol products based on strength (ABV), and increased alcohol duty in line with inflation (RPI).
To support the hospitality industry and pubs, the government increased the value of Draught Relief from 5% to 9.2% for draught beer and cider products and from 20% to 23% for qualifying wine, other fermented products (previously made wine) and spirits.
This change is a welcome first step in starting to tackle alcohol harm. It ensures that higher-strength products – which are associated with more risk – are taxed more. So that its effectiveness does not erode over time the government must introduce an automatic uprating system to keep duty in line with inflation year on year.
Why is duty important when it comes to tackling alcohol harm?
The level of alcohol harm is directly linked to its affordability. The cheaper alcohol is, the more is consumed, and the more harm caused.
The World Health Organization has identified alcohol duty as one of the most effective ways to tackle alcohol-related harm, reduce alcohol-attributed cancers, death rates, and provide other public health benefits such as reducing obesity.
The alcohol duty changes in August 2023 marked the first increase in over a decade. Treasury estimates indicate that cuts and freezes have cost the public purse around £1.8 billion in revenue every year since 2012 – this lost revenue could have paid for 59,000 nurses.
Researchers from the University of Sheffield found that cuts to alcohol duty since 2012 have led to:
- 1,969 additional deaths
- 61,386 additional hospitalisations
- £317 million in additional costs to the NHS
- 111,062 additional criminal offences
- 484,727 additional days of workplace sickness absence
Alcohol duty rates should be linked to the harm alcohol causes.
Alcohol sold in off-trade locations such as supermarkets is associated with more harm than that sold in pubs and restaurants. Charging a higher level of duty for alcoholic drinks sold in shops and supermarkets would allow the government to target tax increases where they would have the greatest effect; without large tax increases for the hospitality sector.
What is the Alcohol Health Alliance UK campaigning for?
We are calling on the government to:
- Introduce an automatic uprating system that keeps alcohol duty in line with inflation year on year.
- To use the revenue raised from the duty increase to fund frontline NHS and alcohol treatment services which are currently not equipped to treat the soaring numbers of people drinking at high-risk.