South West hospitality firms have been reacting to the Government's changes to alcohol duty, which came into force on Tuesday (August 1), labelling them as "confusing" and "a huge blow to the industry".
The changes will see alcohol being taxed on volume rather than type of drink, which means that while some prices will soar others will decrease.
The new duty was set out in the Chancellor's Spring Budget, which said that 38,000 海角视频 pubs and bars would see a tax cut on pints pulled.
Jeremy Hunt, Chancellor of the Exchequer said: 鈥淭he changes we鈥檙e making to the way we tax alcohol catapults us into the 21st century, reflecting the popularity of low alcohol drinks and boosting growth in the sector by supporting small producers financially.鈥
Coined 鈥楾he Brexit Pubs Guarantee鈥 in the Chancellor鈥檚 Spring Budget, the duty paid on drinks on tap in pubs will be up to 11p, lower than at the supermarket. These changes are designed to help the sector compete on a 鈥渓evel playing field鈥 with supermarkets and always pay less alcohol duty than the retailers going forward.
Read more:Bristol鈥檚 鈥榖iggest sweetshop鈥 celebrates 40 years of trading
However, the hospitality sector remains unconvinced. The changes will see duty rise by 44p on a bottle of wine, which when combined with VAT will mean consumers will pay an extra 53p, according to the Wine and Spirit Trade Association (WSTA).
Meanwhile, the total tax on a bottle of gin or vodka will go up by around 90p.
This change, the Government revealed, affects 4,095 pubs and bars in the South West.
Laura Clerehugh, head of hospitality at Fives Cyderhouse, Falmouth, told BusinessLive : 鈥淚n the current economic climate, where households budgets are tighter than ever 鈥 this alcohol duty increase, which is as high as 44% on some drinks is another huge blow to the whole industry and our loyal customers.
鈥淥ver the past few years, hospitality in general has suffered enormously. Staffing since COVID has proved challenging, energy costs have spiralled, food costs are crazy and less people have the disposable income to treat themselves to that after work pint or family meal on the weekend. It has been really, really tough and whilst the Government has tried to sugar coat the duty reform as a fairer and more simple system for taxing alcohol, the bottom line is that they have hiked up alcohol duty tax to the point that a pint of cider, a bottle of wine, a shot of port or a vodka and tonic will cost the customer up to 拢1.30 more than it did on the 31st of July.
Ms Clerehugh added: 鈥淭he most frustrating part of the alcohol duty increase is that our customers don鈥檛 fully understand why prices are going up, so pub owners, managers and employees are being left to educate the general public, respond to reviews from irritated customers and do our best to mitigate these price increases 鈥 it鈥檚 not fair. It does make you wonder when it will end as it is one price rise after another at the moment.鈥
The new method being introduced by the Government will see drinks taxed by strength for the first time and a new relief 鈥 named Small Producer Relief 鈥 to help small businesses and start-ups create new drinks, innovate and grow.
Mike Downs, landlord of The Volunteer Inn in Ottery St Mary said: 鈥淚t鈥檚 a bit of a weird one isn鈥檛 it? Some duty is up, some duty is down. So where we鈥檙e gaining on one side, on the other we鈥檙e losing.
鈥淎nd it鈥檚 confusing. With the cider we sell, Devon Scrumpy is 6.5% ABV so the tax has gone up. Then there are ciders containing fruit other than apples, which are currently classed as wines, so the tax on Fanny鈥檚 Bramble which has an ABV of 4% has gone down. Many of the breweries have already introduced lower ABV beers to save on duty.
鈥淚 think it鈥檚 something of a token gesture by the government to bring supermarkets in line with pubs, to make them look like they鈥檙e doing the right thing. Perhaps it鈥檚 to do with chasing votes for the future election - but it鈥檚 never going to work for the industry until they set a totally fair tax.
鈥淚n all honesty, this is not going to make a blind bit of difference to us. We鈥檝e just had a record-breaking July, and I鈥檝e no doubt our customers will just go with the flow.鈥
While Howard Davies, co-founder and director of Salcombe Distilling Co. added: "The duty increase presents businesses in the drinks industry with the difficult decision of either passing on the impact of the duty increase to customers (both trade and end consumer) or absorbing the impact of this cost themselves and thus reducing (often already slim) margins.
Mr Davies told BusinessLive: 鈥淎t Salcombe Distilling Company, after much consideration, we have decided not to increase our prices on this occasion. We believe both trade and consumers alike, already have enough challenges with the cost of living increases and inflation. It would be great if there is not another duty increase for a few years to allow our entire industry, including producers, distributors, retailers and bars, a chance to thrive!"
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