London's spirit distilleries being 'crushed' by Government hikes in alcohol duty, Chancellor warned

"Duty on spirits was increased by 3.65% in Labour's 2024 October Budget, and by 10.1% under the previous Conservative government in 2023. Spirit distillers in the capital fear another rise could be on its way as Rachel Reeves' Autumn Budget looms and are calling for a freeze to protect the industry and jobs. Owners and co-founders of the North London-based distillery Sacred Spirits, Ian Hart and Hilary Whitney, told The Standard that alcohol tax is crushing small distilleries, pubs, bars and restaurants."

"For each bottle of gin above 22%, the duty rate stands at 32.79 per litre of pure alcohol. The UK's duty rates on alcohol are the highest across the G7, said Ms Whitney. 70% of what you pay for a bottle [of gin] goes to the Exchequer. She added: The government considers that the alcohol business is not an everyday essential so it's an easy way to collect money."

"Around one in four pubs have a distiller supplier that has gone out of business because of the duty increases, according to campaign group UK Spirits Alliance. Mr Hart explained that the beer and cider industries are not subject to the same duty, calling the rise discriminatory. Duty on draught beers has been cut, and small beer producers have been handed a tax break. Spirits are currently being taxed at 16% more per unit of alcohol than wine and 256% more than cider."

Government increases in spirits duty — 3.65% in October 2024 and 10.1% in 2023 — have significantly raised costs for London distillers. Small producers like Sacred Spirits (producing around 500 bottles of gin weekly) face price rises and risk being priced out of the market. Duty for gin above 22% is 32.79 per litre of pure alcohol, contributing to the UK's highest G7 alcohol duty rates. Campaigners report around one in four pubs lost a distiller supplier due to duty rises. Tax treatment favors beer and cider with cuts and breaks, leaving spirits taxed substantially more per unit. Distillers call for a duty freeze to protect businesses and jobs.

Read at www.standard.co.uk