Despite plans to raise alcohol duties by 8 per cent as stated in the pre-Budget report, Alistair Darling was forced into a U-turn on alcohol duty after miscalculations. The treasury subsequently laid an order before parliament which curtailed the rise of spirits to 4 per cent.
The planned rise would have added 29p to a standard bottle of whiskey, which was immediately condemned by the Whisky Association as a “counterproductive and damaging blow”. The miscalculation occurred as officials had considered the rise using the potency of standard spirits which lies at 37.6 percent; most whiskies however are 40 per cent.
“I’m tabling a further order today to ensure that on spirits the duty there is at a slightly lower rate, which I think will hugely benefit the spirits industry wherever it is,” said Darling when questioned on his retreat.
The Wine and Spirit Trade Association welcomed the manoeuvre, but still pointed all fingers towards the price hike – with prices rising for over 90 per cent of wines sold under £6 mark in off-licences, the association voiced concerns over the wine sector bearing the burden of higher prices.