Pubs are more than pints – so why does the tax system favour beer?

Whether that’s a G&T in the sunshine, a cocktail on a night out, or one of the fantastic alcohol-free alternatives that have become so readily available in recent years.

The UK spirits industry is one of our most vibrant sectors. It supports over 446,000 jobs and contributes £13 billion to the UK economy. As MPs, many of us have had the pleasure of visiting local distilleries and seeing for ourselves how integral they are to our local economies and the wider hospitality sector.

Yet the sector is struggling. Excise duty hikes, increased operating costs, sustainability requirements – not to mention the threat of a Deposit Return Scheme in Wales that doesn’t match others across the UK.

I have long been saying that pubs are more than pints. Yet, what is not understood is that the UK's alcohol duty system is a major reason why a night at the pub increasingly feels out of reach.

A third of drinks sold in hospitality settings are spirits-based. I know from my own friendship group that women in particular often prefer a G&T, vodka & lemonade or a cocktail to a pint of beer.

Yet successive excise duty hikes totalling 17% over the last three years have driven up consumer prices. Time and again, landlords have told me that they have no choice but to pass the cost on to punters.

The way that excise duty is currently calculated discriminates against spirits. A single G&T is one unit of alcohol. A standard pint of lager is about 2.8 units. Yet spirits are taxed vastly more per unit of alcohol than any other category, despite the fact that the Chief Medical Officer’s low-risk drinking guidelines do not discriminate between spirits and other sorts of alcohol. There is no public health justification for the tax system to penalise spirits the way it does.

Then there’s the calories. Spirits-based drinks are often much lower in calories than other products. So why is the Government rewarding beer and encouraging higher volume drinking of products that contain more units and more calories?

Most of us assume all alcohol is taxed at the same rate, on units rather than ABV. The reality is that those of us who prefer a gin and tonic or cocktail are disproportionately being priced out of a drink at our local as a result.

This week, I will be in Parliament with distillers from across the country calling on the Government to cut excise duty at the Budget. The current system isn’t working for anyone – consumers, pubs, distillers, or even the Treasury.

Despite successive alcohol duty hikes, the Exchequer has collected less, with spirits revenue falling by £94 million last year, now sitting £1.1 billion below the OBR's own 2023 forecast. A penny off a pint was a gimmick that did little for struggling hospitality businesses, which rely on spirits every bit as much as beer.  A cut to spirits duty would not only support the spirits industry through these difficult times and drive economic growth for the Treasury, but would also provide a permanent way to fund the 20% business rates cut for hospitality, easing the burden for pubs while providing cost-of-living relief for pubgoers.

As the Chair of the UK Spirits All Party Parliamentary Group, I'm proud to represent hundreds of spirits producers across the country and have been lucky enough to visit some of the 35 distilleries in Wales alone. I've seen first-hand that these distilleries are vital not just to our economy but to our culture and communities: creating jobs exactly where they're needed most and flying the flag for Britain around the world. These are precisely the British businesses the Government has pinned its growth ambitions on.

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Carolyn Harris MP is the Chairwoman of the All-Party Parliamentary Group on UK Spirits.

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