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Emergency Budget: Alcohol Duty Freeze

In his emergency budget delivered today, Chancellor George Osborne has announced that that there will be no increase in alcohol duty at this time and that the increase in duty on cider, introduced just three months ago, will be reversed.

This increrase in cider duty was a small step towards reducing the discrepancy in duty between cider and beer. For a pint of 4.5% abv beer the duty is 42p; for a similar pint of still cider the duty is currently 20p and will be reduced to 19p at the end of the month.

The Chancellor also announced that alcohol duty will be revisited in the autumn, with a focus on drinks that are most associated with binge drinking. This is considerable cause for concern, as there is good evidence that targeted taxes are ineffective. For example, several countries have introduced taxes on alcopops with the effect that consumption of spirits amongst young people has increased.

Alcoholic drinks are to some extent interchangeable, especially amongst those who drink to get drunk. Targeting one drink will result in drinkers switching to another drink, which may carry with it greater risks than the original 'problem drink.'