Alcohol Duty Changes

The government announced an increase in duty rates under a revised duty structure for UK alcohol taxation during the Spring 2023 budget. The changes come into effect on 1st August 2023. We've worked closely with our suppliers to help you understand, and take advantage of opportunities from these changes, and the new categories they create.

These price changes come into effect for orders delivered from 1st of August.

As a result of the changes, our prices will be adjusted to reflect the new duty rates and duty structure – the largest change to Alcohol duties in over 50 years. The changes will come into effect for orders delivered from Tuesday 1st August 2023.

Key facts

The main beer duty rate will increase by the rate of inflation (RPI) which represents a 10.1% increase in the duty rate. As a guide, this will result in a 3p increase for a 330ml bottle of 5% beer and a 5p increase for a 500ml bottle of 5% beer.

The Government have introduced Draught Relief for alcohol packaged in kegs, casks or bag in box for consumption in the on-trade provided the container is 20 litres or more and the strength is not more than 8.5%. The relief works by reducing the duty rate by 9.2% and effectively cancels out the main beer duty rate increase. For this reason, there will be no increase to keg, cask and bag in box prices for products that are eligible for Draught Relief.

As part of an ambition to simplify tax bands and encourage consumption of lower strength products, the Government have adjusted and aligned low and high strength duty rates as follows:

➢ The low strength rate now applies to beers under 3.5% abv (previously under 2.8%) and is 55.9% lower (per litre of alcohol) than the main beer duty rate.

➢ The high strength rate now applies to beers over 8.4% abv (previously over 7.5%) and is 35.6% higher (per litre of alcohol) than the main beer duty rate.

The change to the low strength rate represents a significant duty saving and, as a result, may lead to a new beer category developing for <3.5% beers. We have worked to provide three draught options in the category including a new lager from the world famous Hofbräu brewery, the imagination catching Schofferhofer Grapefruit and the renowned Kernel Table Beer exclusively available in 50ltr kegs for the first time.

More detail on the changes can be found in the table below per unit (i.e. 1 bottle not 1 case). If a full new price list, detailing all new pricing for listed beers, would be helpful then please get in touch with Sales@jamesclay.co.uk (providing your Account Code shown on invoices) and we will produce for you.

One curious upshot of these changes, is that draught beers that sit between 7.5% and 8.4% ABV should see a sizeable discount in their duty, potentially opening up some Belgian beers to a wider audience.

These changes also make space for a focus on the classic British Cask Pale Ales that sit within that 3.4% ABV duty sweet spot. With many that sat at 3.5% being marginally adjusted to meet the new requirements.