An’ damn’d Excise-men in a bussleAll the talk this morning is about the cost of alcohol and I wondered how the tax is calculated—it is complicated. The quote in the title is to reflect that it is close to Burns Night and we are not able to get to the dinner 🙁
The general principle is that the tax (excise duty) on beer and spirits is based on the alcohol content—which makes sense. The duty on all other drinks is charged at various different flat rates—which doesn’t. The reasons are largely political. Here is a simplified table with the current rates…
| Beer | 17.32p/Ltr/%Alc |
| Still cider 1.2%–7.5% | 33.46p/Ltr |
| Still cider 7.5%–8.5% | 54.04p/Ltr |
| Sparkling cider 1.2%–5.5% | 33.46p/Ltr |
| Wine & alcopops 1.2%–4% | 69.32p/Ltr |
| Wine & alcopops 4%–5.5% | 95.33p/Ltr |
| Still wine & alcopops 5.5%–15% | 225.00p/Ltr |
| Sparkling wine, cider & alcopops 5.5%–8.5% | 217.83p/Ltr |
| Sparkling Wine & alcopops 8.5%–15% | 288.20p/Ltr |
| Wine & alcopops 15%–22% | 299.97p/Ltr |
| Wine & alcopops >22%, spirits, all spirit based alcopops | 23.80p/Ltr/%Alc |
This duty is charged at source to the manufacturer. On top of this VAT, currently 20%, is charged on the retail sale price.
So lets do some examples (the minimum price assumes that it costs nothing to manufacture & ship and the end customer pays all the tax).
3.5% beer—duty 34.5p per pint—Minimum over the counter price 42p
Flandres 2.6% gnats—duty 11p per 250ml bottle—Minimum price 14p
Special Brew 9% fighting juice—duty 78p per 500ml can ==> Minimum price 94p
A nice 14.5% Rioja—duty £1.69 per 75cl bottle—Minimum price £2.03
Budget 30% vodka—duty £5 per 70cl bottle—Minimum price £6.00
Bacardi 151 death wish—duty £17.97 per litre—Minimum price £21.56
The news today was that there should be a minimum retail price for beer set at 21p per unit of alcohol (1% in 1 litre) and spirits at 28p per unit. With the same examples as above we get
3.5% beer—pint—Minimum over the counter price 42p
Flandres 2.6% gnats—250ml bottle—Minimum price 14p (costs 28p in Sainsbury’s)
Special Brew 9% fighting juice—500ml can ==> Minimum price 95p (£1.57 in Sainsbury’s)
A nice 14.5% Rioja—75cl bottle—Minimum price £2.28 (assuming the beer rate)
Budget 30% vodka—70cl bottle—Minimum price £5.88
Bacardi 151 death wish—litre—Minimum price £21.14
i.e. identical for beer and close for spirits. When there was a big fuss about this last summer I did see basic lager on sale for less than 50p per litre. 3% lager would now be at least 63p.
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