Estimating the differential exposure of household groups to alcohol duty reforms in Great Britain

Background

We explored the potential impact of changes to the UK alcohol tax system implemented in August 2023 on increases on consumer spending, the separate impacts of the changes to the duty structures, and how these impacts vary between households depending on their level of alcohol purchasing and their socioeconomic position.

Methods

We used household-level purchasing data from Kantar’s Worldpanel to analyse four alternative scenarios, reflecting the three separate components of the duty reforms (the changes to the duty structures, the temporary wine easement, and the additional 10.1% increase in duty rates).

Results

In the 12 months prior to the implementation of the reforms, the average household spend on off-trade alcohol in Kantar’s Worldpanel was £324.37 (August 2022–July 2023). This average conceals a heavily skewed distribution, with the lowest-purchasing 20% of households spending an average of £20.47 per year compared to £1206.68 for the highest-purchasing quintile. On average, households in higher socioeconomic position spend more on alcohol than those in lower socioeconomic positions—£339.19 compared to £302.37.

Conclusion

Our results provide support for the structural reforms to alcohol duty introduced in the UK being effectively targeted at the heaviest alcohol purchasers, with no evidence to suggest that they are likely to increase economic inequalities.