Rachel Reeves is being accused of slamming pubs with a damaging tax pushing bar and pubs “on its knees.”
Wine and spirit chiefs are warning the government and consumers they will have “no choice but to increase prices” to try and stay in business.
During November’s Budget Reeves said that alcohol duty will increase in line with the Retail Prices Index.
From 1 February tax on alcohol duty will increase by 3.66% which industry chiefs have warned there will be cost increases.
Emma McClarkin, chief executive of the British Beer and Pub Association, said, “These changes unfortunately increase the likelihood of further price rises, which no brewer or publican would want to inflict on their customers.
“For brewers, who already pay some of the highest rates of beer duty in Europe, this increase will add further strain to their already razor-thin profit margins and risk one of the UK’s world-renowned industries producing the greatest beers in the world.”
Miles Beale, chief executive of the WSTA, said, “Despite the OBR (Office for Budget Responsibility) at last acknowledging higher prices lead to a decline in receipts, the Government fails to recognise that its own policy is benefiting no-one.
“For the nation’s wine and spirit sector the complexities of price changes, especially for wine which is now taxed by strength, mean more red tape headaches ahead.
“Add to this all the other costs – including NI (national insurance) contributions, business rates and waste packaging taxes – and businesses have no choice but to increase prices in order to keep afloat, which unfortunately means consumers are going to take the hit once again.”
A Treasury spokesman said, “For too long the economy hasn’t worked for working people, and cost-of-living pressures still bear down.
“That’s why we are determined to help bring costs down for everyone.
“It’s why we’re taking £150 off energy bills, increasing the National Living Wage, ending the two-child limit, rolling out free breakfast clubs for all primary school children, and freezing fuel duty, rail fares and prescription fees.
“We need to rebuild the public services we all rely on.
“We’ve put record funding into our schools and NHS to give every child the best start in life and bring down waiting lists.
“Alcohol duty plays an important role in ensuring public finances remain fair and strong and funds the public services people rely on every day.”
