All alcohol duties were frozen for the second year in a row in the 2021 Budget, marking the eighth year out of the last nine that alcohol duties have failed to keep up with inflation.

According to the Office for Budget Responsibility’s costings, the freeze in alcohol duties – a cut, in real terms – are estimated to cost roughly £1.7bn to the year 2025–26.

Exchequer's impact of alcohol duty changes on HM Treasury revenue (£million)
Exchequer’s impact of alcohol duty changes on HM Treasury revenue (£million)

Chancellor of the Exchequer Rishi Sunak’s statement came ahead of the government’s much anticipated response to the alcohol duty review consultation held late last year.

Responding to the announcement, IAS Chief Executive Katherine Severi said:

‘It is disappointing that the Chancellor has chosen to freeze alcohol duty today, which represents a cut in real terms. This will do nothing to help the thousands of families across the country whose lives are blighted by alcohol, an issue which has become even more acute during the pandemic.

‘We need to rethink how alcohol is taxed to ensure public health is always given priority over alcohol industry profits. Raising alcohol duty can generate vital public funds to support the NHS and social care services and the public are largely supportive of this policy.

‘The ongoing alcohol duty review is a once-in-a-generation opportunity to improve a broken system which promotes cheap, strong alcohol that wrecks lives and burdens our NHS and public services. We will continue to work with government to propose a fairer system that produces net gains for society, not just supermarket profits.’