A brewery in the West Midlands has slammed the Budget announcement today as a surprise change to alcohol duty was announced by the Chancellor.
Rachel Reeves has announced she will be cutting the duty on draught beer by 1.7 per cent, claiming the change will mean a “penny off the pints at the pubs”.
The Chancellor told the Commons: “I can confirm that alcohol duty rates on non-draught products will increase in line with RPI from February next year, but nearly two-thirds of alcoholic drinks sold in pubs are served on draught.”
Davenports Brewery has been producing beer since the 19th century and reacting to the announcement, Brand Manager, Harry Higgs, was disappointed.
Brand Manager, Harry Higgs said he was disappointed with the Budget
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He told GB News: “For 195 years, Davenport’s has been known as the beer with lots of cheer, unfortunately, after today’s budget, there’s not much for us or our customers to cheer about.
“Although any decrease is welcome, 1p I don’t think is really going to cut it. The truth and the reality is, with the increase of electricity and even when it comes to our own brewery, the brewing costs of grain, the inflation of employment costs, 1p just really isn’t going to cut the mustard.
“I don’t think our customers are really going to feel the full impact of it. It’s not going to increase, for instance, people converting from wine which has been increased, over to beer for 1 penny.
“You won’t see anybody out there that’s going to be jumping up and down in the aisles over it.”
In August last year, the previous Tory Government introduced the largest alcohol duty increase in almost 50 years adding 20 per cent to the tax on over 85 per cent of all wines in the UK and more than 10 per cent to tax paid on full-strength spirits.
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Higgs told GB News ‘there’s not much for us or our customers to cheer about’
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From September 2023 to August 2024 alcohol duty raised £11.8billion, down from £13.1billion in the same period the year before. The biggest drop was for spirits, whose revenue plummeted by £750million, followed by beer which saw a £320million drop in profits.
Chief Executive of the Wine and Spirit Trade Association, Miles Beale, called the changes to duty “a real kick in the teeth”.
He said: “The Chancellor’s decision to increase alcohol duty by RPI is a real kick in the teeth for both businesses and consumers. We simply cannot understand why the Government has said they are trying to protect income and in the next breath raising alcohol duty in a move that is totally counterproductive.
“Recent history has shown us that duty increases lead to price rises for consumers, a dip in sales and, as a result, fewer receipts for the Treasury. The near £500million loss in alcohol duty receipts, in the last six months, couldn’t make that clearer.
“We are bitterly disappointed that Labour, despite their manifesto pledge to prioritise growth, has chosen not to listen to business – especially SMEs, which will be hit hardest of all. Instead of reversing the last Government’s damaging plans to bring in unnecessary, complex and costly changes to the way wine is taxed, Labour wants to plough ahead. And for what?”
Reeves confirmed the retail, hospitality and leisure industry will receive 40 per cent relief on business rates from 2025/26.
Reeves confirmed the retail, hospitality and leisure industry will receive 40 per cent relief on business rates from 2025/26
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The Chancellor told the Commons: “From 2026-27, we intend to introduce two permanently lower tax rates for retail, hospitality and leisure properties, which make up the backbone of high streets across the country, and it is our intention that is paid for by a higher multiplier for the most valuable properties.
“But the previous Government created a cliff-edge next year, as temporary relief ends, so I will today provide 40 per cent relief on business rates for the retail, hospitality and leisure industry in 2025-26, up to a cap of £110,000 per business.”
That change has been met with mixed reaction from across the hospitality sector, Harry Higgs at Davenports told GB News: “If she wants to make more of an impact and really help us out as a hospitality industry, I would personally like to see something that would have helped the level playing field with the supermarket pricing, rather than just taking a penny off.
“You’re going to see a lot of small businesses within an already struggling hospitality sector, really really struggling next year.”
Emma McClarkin, CEO of the British Beer and Pub Association, says the industry was “recognised” in the budget but was disappointed at the lack of business rate reforms.
She said: “The Chancellor clearly recognised the sector with some business rate relief – albeit at a lower percentage – and a cut to draught beer duty, but it is hard to see how this Budget will unlock growth and the critical investment needed to deliver it.
“The cumulative impact of today’s announcement means a £500m increase to the cost of doing business for the industry putting pubs, brewers, investment and jobs at continued risk.
“We urge the government to fast forward delivery of the detail on the positive news on permanent business rate reforms to give our sector the best chance of continuing to serve their communities and regenerate our high streets. Only then will there be the headroom for future investment and growth.”