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The price of an average glass of wine will go up by 4p and a one-litre bottle of vodka by £1.45 on 1 January, if States Members back the Government’s spending plans for next year.
Ministers are proposing an 8.9% duty increase on all strengths of wine, with the duty on a 175ml glass likely to rise from 39p to 43p, and the duty on a 750ml bottle rising by about 15p.
The duty on beer and spirits will also rise by 8.9%, which Ministers stress is below RPI which currently stands at 10.9%.
It is the first alcohol duty rise in two years, after the Government froze alcohol rates last year to support the post-covid recovery of the hospitality industry.
Justifying the increase, the Government Plan states: “Jersey has among the highest levels of alcohol consumption across OECD countries. At the same time, the hospitality industry continues to face challenges.
“Following last year’s alcohol duty freeze, Ministers are proposing to strike a balance between the public health goals of ensuring that the price of alcohol does not become cheaper relative to other goods and the Government’s support of the hospitality industry by raising duties by 8.9%, which is two percentage points below the growth in RPI.”
Pictured: The duty on an averagely priced glass of wine will rise by 4p on 1 January, if the States agree.
Duty on cigarettes and loose tobacco will rise by an above-inflation 15.9%, with the duty rising by £1.38 on a pack of 20 cigarettes. Duty on a 50g pack of rolling tobacco will rise by £5.53.
The 15.9% rise for tobacco is based on a standard formula of RPI+5%.
Meanwhile, duty on cigars will rise by 18.9%, if the spending plans are approved by the Assembly in December.
Explaining this rise, the plan says: “Following the recommendation of the Public Health Directorate, ministers are proposing to increase duties on tobacco products by 15.9%, which is the sum of June 2023 RPI (10.9%) and an additional 5% escalator.
“Cigars will be subject to an increase of 18.9% in line with existing policy to close the gap between the duty charged on cigars and cigarettes, bringing the cigar duty rate gap to £82.90 per kg in 2024, compared to £87.30 per kg in 2023.
“The proposed increases in tobacco duty for 2024 would see a £1.38 increase in the excise tax on a standard packet of 20 cigarettes (from £8.71 to £10.09 per packet).
“The increase on hand-rolling tobacco of 15.9% sees a £5.84 increase in a 50g pouch (from £34.83 to £40.37 per pouch).”
The Government Plan also suggested that vape products could be taxed in future with the aim of "reducing the consumption of nicotine" and helping to "meet the social costs of vaping".
The duty increases on alcohol and tobacco were welcomed by the head of poverty campaign charity Caritas.
Patrick Lynch, who stressed he was speaking in a personal capacity, said he understood the health benefits of increased duty on alcohol and tobacco, and the increases were a positive step, although he recognised they were "almost negligible".
"It's the [7p per litre] increase on fuel duty that will affect low-income islanders more," he added.
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