United Kingdom: Changes to UK Alcohol Tax Rates May Challenge US Exports of Some Alcoholic Beverages
Changes to UK alcohol tax rates were implemented on August 1, 2023. The UK government calls this an alcohol duty, but it is an excise tax charged at the point of production or importation of drinks of alcoholic strength exceeding 1.2 percent alcohol by volume (ABV) – the percentage of pure alcohol per liter of product. The new system aims to simplify alcoholic beverage taxes to make them more consistent across different alcohol types. This supports UK public health goals by encouraging consumers to reduce their alcohol consumption and producers to reduce the ABV of their beverages by taxing alcohol based on its strength. As a result, beverages with higher ABV have higher taxes while beverages with lower ABV have lower taxes. The alcohol taxes apply equally to all alcoholic beverages sold in the UK, regardless of country of origin. In the long term, changes to consumer purchasing habits could result in an increased shift in the volume of sales to alternative alcoholic beverage categories.