March 12, 2008 / 1:45 PM / 10 years ago

Darling raises alcohol duties above inflation

LONDON (Reuters) - Chancellor Alistair Darling announced on Wednesday that alcohol duty will increase by 6 percent above the inflation rate with hefty rises in beer, wine and spirits coming in at midnight on Sunday.

<p>A selection of alcopops are displayed in an off licence in London March 7, 2008. REUTERS/Luke MacGregor</p>

In his first budget, Darling told parliament that beer will rise by 4 pence a pint, cider by 3p a litre, wine by 14p a bottle and spirits by 55p a bottle, marking the first rise in duties on spirits in more than a decade.

Darling argued that as incomes have risen, alcohol has become more affordable, and he added that alcohol duties will increase by 2 percent above the rate of inflation in each of the next four years.

“In 1997, the average bottle of wine bought in a supermarket was 4.45 pounds in today’s prices. If you go into a supermarket today, the average bottle of wine will cost about 4 pounds,” he told parliament.

The British Medical Association (BMA) welcomed the move as the UK is one of the heaviest alcohol-consuming countries in Europe and spends millions of pounds treating people with its problems and deals with crime and violence linked to its misuse.

“It is very important that tax increases on alcohol are part of a larger plan to reduce problem drinking. The evidence tells us that the cheaper and more accessible alcohol is the more people will drink,” said Dr Vivienne Nathanson, the BMA’s head of science and ethics said in statement.

But Rob Hayward, chief executive of the British Beer & Pub Association, said: “The millions of people who enjoy beer have just been hit by a 50.5 million pound a month tax raid on their family budgets”.

He added Treasury revenues will continue to fall, pubs will continue to close and beer sales sink further, and added that the government was punishing all beer drinkers rather than tackling the minority of those involved in binge drinking.

There was little reaction in drink stocks with Smirnoff vodka and Johnnie Walker whisky maker Diageo unchanged at 10.12 pounds while Britain’s biggest pubs group Punch Taverns was up 0.3 percent at 606p by 2:25 p.m.

Tax on tobacco will also rise, adding 11p to a pack of 20 cigarettes and 4p to the price of 5 cigars.

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Editing by David Jones and Stephen Nisbet

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