The UK beer scene has been shaken up with the latest alcohol duty hike, which came into effect on February 1st. If you enjoy bottled or canned beer, you might soon feel the pinch.

What’s Changing?

The government has increased duty on non-draught beer by 3.6%, making it more expensive for breweries and consumers alike. This move is part of a broader tax reform aimed at basing alcohol duty on strength rather than category. While this makes sense from a public health perspective, it also means stronger beers face even higher costs.

On the flip side, draught beer and cider saw a 1.7% duty reduction, thanks to an increase in Draught Relief to 13.9%. This is great news for pubs and taprooms, but if you prefer cracking open a cold one at home, expect price hikes.

How Will This Affect Beer Prices?

The cost of bottled and canned beers will likely rise as breweries pass the tax increase onto consumers. Some industry experts predict that craft breweries may struggle more than mass-market brands, as they often operate on thinner margins.

For reference, a similar duty increase in past years led to average price hikes of 5-10p per bottle or can, depending on the brand and alcohol content. If you’re a fan of high-ABV beers, brace yourself—your favourite brews might see an even bigger bump in price.

What This Means for Breweries & Beer Lovers

For breweries, this duty hike means tighter profit margins and potential changes in production. Some may opt to produce lower-ABV beers to avoid higher tax rates, while others may absorb the costs to stay competitive.

For consumers, it’s time to be strategic. If you’re a frequent buyer of bottled or canned beers, consider exploring draught options at your local pub, where prices may remain steadier. However, with the ongoing cost-of-living crisis, fewer people may be willing to spend extra money drinking out, potentially putting even more pressure on the hospitality industry.

Final Thoughts

This latest duty hike is yet another hit to both consumers and breweries. While draught beer gets a slight tax break, it’s unlikely to offset the financial pressure many are facing. With home drinkers seeing price hikes and pubs still struggling to recover from recent economic challenges, the UK beer industry is at a crossroads.