UK Autumn Budget 2021: How pubs and booze producers reacted to Rishi Sunak’s alcohol duty changes

The Chancellor Rishi Sunak announced what he described as the ‘most radical simplification’ of the alcohol duty system for 140 years in his Autumn Budget 2021

Rishi Sunak’s Autumn Budget has largely been a good one for consumers, producers and servers of alcohol.

The Chancellor announced the tax system is to be simplified from 2023, with rates depending on the amount of alcohol in a drink.

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As a rule of thumb, lower strength drinks will be taxed less while higher strength drinks will be taxed more.

And if you prefer to have your beer or cider served straight from the tap in your local, you can expect to pay up to 3p less thanks to a new ‘draught relief’ scheme.

So how have drinkers and the industry reacted to the Budget?

Alcohol duty simplification and duty freeze praised

The Chancellor was keen to trumpet his decision to simplify the alcohol duty system.

But it was his less publicised decision to freeze duty that drew the most praise from the industry.

Chief executive of trade body the British Beer & Pub Association (BBPA) Emma McClarkin said it would save £177m and secure 9,000 jobs across the country.

“The Chancellor’s decision to freeze beer duty instead of the Retail Price Index linked increase he had planned is to be warmly welcomed,” she said.

“Clearly, the Chancellor listened to the 134,000 people who signed the Long Live The Local petition calling on him to support pubs and brewers in the Budget.”

The Chancellor Rishi Sunak claimed his Autumn Budget 2021 alcohol tax system changes were the biggest in 140 years (image: Getty Images)

McClarkin also praised the announced changes to the booze tax system.

“Beer is a low-strength product and breweries have invested heavily in developing a range of innovative, exciting and great tasting low and no alcohol beers.

“We therefore welcome proposals to reduce duty on lower-strength products as part of the proposed modernisation of the alcohol duty regime to better incentivise the consumption of lower-strength drinks.”

She was echoed by Jonathan Neame, chief executive of Kent-based independent brewery and pub chain Shepherd Neame.

“After the extraordinary challenges of the last 18 months, this is an important moment for beer and pubs, and will help support their recovery and meet the challenge of substantial underlying supply chain cost inflation,” he told PA.

“It is great to see that the Government recognises that beer and pubs play a fundamentally important role at the heart of British life.”

The wine and spirits industry gave a more mixed response to the headline Budget announcements.

While sector body the Wine & Spirit Trade Association (WSTA) welcomed the freeze on alcohol duty as well as the scrapping of the sparkling wine tax premium - the tax on the drink has been brought in line with still wine - it said Mr Sunak’s new tax system “does not make the regime fairer”.

“We are mystified by a proposal that embeds unfairness between products meaning that beer will be taxed between 8p to 19p per unit, wine increases to 26p per unit and spirits remains at 29p per unit,” said CEO of WSTA Miles Beale.

The Wine and Spirit Trade Association criticised the fairness of the new alcohol tax system announced in the Autumn Budget 2021 (image: Shutterstock)

Mixed reception for ‘draught relief’

In a bid to give better recognition to the contribution of the ‘on-trade’ - i.e. pubs and bars - to local communities, Rishi Sunak announced in the Budget that draught beers and ciders would have a cut in duty of around 5%.

It was an announcement that was broadly welcomed by the industry - although, some said it didn’t go far enough.

The Campaign for Real Ale (CAMRA) described the move as “a gamechanger” for drinkers and pubs alike.

“We are delighted that the Government has listened, supported our locals and introduced the important principle that beer, cider and perry served in a pub or social club should be taxed at a different rate to alcohol bought at places like supermarkets,” said CAMRA national chairperson Nik Antona.

“CAMRA has previously commissioned research that showed that a Draught Beer Duty rate could pull consumption into pubs and social clubs from the off trade, providing a boost to pubs and local economies.

“We hope that pubs and producers will make sure drinkers see the impact of this revolutionary policy on the price of their pints, to encourage them to return to their locals.”

CEO of brewer and pub chain Greene King Nick Mackenzie told PA the announcement of duty reform and the new draught scheme was “a much needed vote of confidence in the great British pub as we face into an uncertain winter, labour disruption and rising costs”.

But the BBPA urged the Government to go further.

“The overall beer duty rate in the UK remains amongst the highest in Europe,” said BBPA chief McClarkin.

“It is vital for Britain’s brewers, a world class homegrown manufacturing success story, that the overall beer duty burden is reduced – not just duty on draught beer in pubs.”

Meanwhile, smaller brewers questioned whether the draught tax cut would change anything in its current form.

“The headline is attention-grabbing because it’s a reduction,” business partner at the Aylesbury-based family-run Chiltern Brewery Tom Jenkinson told PA.

“The question is quite what that transpires to – 3p is not going to make much of a difference at the bar. 50p might do; I think 3p is going to get lost in the noise.

“If you take 5% off, it’s not a lot of money to be honest … It’s a step in the right direction, but I’m not sure how much it’ll transpire to the punter behind the bar.”

While CAMRA described it as a ‘gamechanger’, other groups were not as convinced by Rishi Sunak’s draught relief scheme (image: Shutterstock)

How other Budget announcements were viewed

While alcohol taxation was one area affecting pubs, bars and other hospitality outlets, separate announcements also impacted them.

The Chancellor revealed roughly £7bn worth of cuts to business rates after a review into the business property tax.

Rishi Sunak announced a series of changes for next year, including the cancellation of next year’s increase in the rates multiplier and a 50% cut to next year’s rates for most retail, hospitality and leisure businesses.

According to, BBPA’s McClarkin, it was good news for a sector in the midst of a “fragile recovery” but she warned the “inherent unfairness of the business rates system for pubs” had not been addressed.

“Pubs pay 2.5% of business rates despite accounting for only 0.5% of rateable turnover – an overpayment of £570m. Cancelling the rates multiplier and cutting rates for pubs by 50% for one year is a much-needed boost.

“The 50% cut to business rates alone will save pubs £169m. However, the cap of £110,000 per business is a huge dampener and means a significant number of pubs will not benefit from the relief at all.”

Additional reporting by PA

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