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Budget 2018 analysis

Beer duty 18% lower than 2012, following yet another real-terms cut

Beer duty is now 18% lower than in 2012, accounting for inflation, according to an Institute of Alcohol Studies analysis of the 2018 Budget. The report – which takes stock of the impact of recent fiscal policy following real terms cuts to alcohol duty for the sixth year out of seven – also found that cider and spirits duty have each fallen by 10%, and wine duty by 2%.

The consequences for the public finances are laid out: cumulatively, the duty cuts will cost HM Treasury over £1.2 billion by 2018/19, and a total of £9.1 billion by 2024. Moreover, the report suggests that these reductions in alcohol duty have increased alcohol affordability and consumption, leading to hundreds of deaths, but little benefit to the pub trade.

The likely effects of the government’s introduction of a new band of duty on cider between 6.9% and 7.5% are also explored in the report. The measure is targeted at white ciders, and if successful will incentivise producers to reduce the strength of their products: for example, a three-litre bottle will contain 20.7, rather than 22.5 units of alcohol. However, this is likely to have only a modest effect on affordability and consumption.

You can clicks on the link above or the image to read and / or download the report.