New UK Alcohol Tax Could Affect US Exports, USDA Says
A recent increase in the U.K.’s alcohol tax rate may “challenge” U.S. alcohol exports to the country, although it’s “too early to tell” how much of an impact the change will have, USDA’s Foreign Agricultural Service said in a Sept. 18 report. The new duty, effective Aug. 1, is an excise tax charged at the point of production or importation of drinks exceeding 1.2% alcohol by volume, USDA said, and could lead to a shift toward more purchases of “alternative alcoholic beverage categories.” Drinks with ABV above 8.5% now face a $35.67 tax for each liter of pure alcohol in the product, the agency said, adding that products with lower alcohol content but that previously faced higher taxes due to their type of alcohol will now face lower taxes.
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The report said the tax hike will affect some American craft beers and most wines, and it could cause U.K. consumers to buy cheaper alcohol and fewer beverages with high ABV. “Equally, given that many American alcohols are already sold at premium prices, increasing their costs could have an impact upon sales.”