The Government said in its Spring Budget document that it would consult on the introduction of a new duty band to target cheap, high-strength ‘white’ ciders below 7.5% ABV.
It also will consult on the impacts of a new, lower strength still wine band to encourage the production and consumption of lower strength wines.
European Union (EU) law requires beer and spirit duties to be directly proportional to alcohol content and the Government introduced an additional duty on high-strength beer in 2011 and lowered the duty on low-strength beer.
Cider and wine duties must be banded, which means that any drinks within a band pay the same duty, regardless of their alcoholic strength.
Beer is the leading lower strength drink
Currently, a pint of 1.3% ABV still cider has the same alcohol duty price as a pint of 7.5% ABV cider.
BBPA chief executive Brigid Simmonds said the trade body will respond to the consultation because it has always made the case for more action to ensure lower strength drinks such as beer attract lower alcohol duties.
She lauded the Government’s progress with the introduction of lower rates of duty for beers under 2.8% ABV but was disappointed that this consultation will not be looking at measures to support beers with an ABV level between 2.8% and 7.5%, as it is with as cider.
Simmonds said: “Beer is by far the leading lower strength drink, and lower duty rates have spurred innovation and offered more choice for consumers in the sector.
“However, this is very much a work in progress, and we would like the treasury to be looking closely at how the system can be improved; raising the 2.8% threshold, for example, would bring many more beers into the lower rate and could boost lower-strength choices for consumers."
Opportunity for more competitive tax system
She added: “As we move towards Brexit, there is an opportunity to ensure a more competitive tax system for beer than is possible within the current tax framework of the EU structures directive, which only allows for lower rates of tax for beers up to 2.8% ABV. Now is the time to be looking very seriously at these issues.”
The consultation will run for 12 weeks, closing at 11.45pm on 12 June.
The Government will announce its next steps once the consultation has closed and all responses have been received and considered.