Price of your pint is to fall by 1p after draught duty cut in Autumn Budget

Rachel Reeves has announced an decreased draught duty as part of the Autumn budget – saving drinkers a penny off a pint in the pub.

The Chancellor did say alcohol duty rates on non-draught products will increase in line with RPI next year as a part of Labour’s efforts to plug what it claims is a £22 billion ‘black hole’ in public finances.

But good news for beer lovers – under Labour’s plans, the price of a pint will decrease by a penny.

But leading figures in the drinks industry have warned the move will further restrict sales and result in more pub closures.

Alcohol duty was frozen for almost three years from autumn 2020 to August 2023, during which time the UK saw an increase in taxable revenue.

But following then-Chancellor Jeremy Hunt’s tax on alcohol in 2023 in line with inflation, prices went up by 10%. He also changed the way duty was calculated for wine, which saw it increase in price by 20%.

From September 2023 to August 2024 alcohol duty raised £11.8 billion, down from £13.1 billion in the same period the year before.

The biggest drop was for spirits, whose revenue plummeted by £750 million, followed by beer which saw a £320 million drop in profits.

Emma McClarkin, the chief executive of the British Beer and Pub Association (BBPA): ‘We know from experience that beer duty increases rarely raise expected revenues, especially when many consumers are facing the cost-of-living crisis and are increasingly sensitive to price.

‘It’s imperative that the Government realises that any hike in beer duty won’t just turn away customers, it could have a catastrophic knock-on effect.

‘Any fall in demand might reduce other taxes and employment opportunities. Only when they reduce the cost of business can pubs continue to be a vital asset to both the economy and communities.’

The drinks firm behind Magners and Tennent’s said it has seen ‘some consumer caution’ ahead of today’s budget.

It came as C&C Group revealed lower sales for the past half-year as poor summer weather hit demand for cider.

Shares in the company slipped on Tuesday morning as a result.

The company said: ‘Trading conditions remain tough, and sentiment regarding the UK autumn Budget has generated some consumer caution; however, positively, we have well-executed plans in place for the Christmas and New Year period, as well as encouraging trading momentum.’

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