No: CE 15                                            28 November 1995

                          BUDGET 1995 : EXCISE

                  CHANGES IN ALCOHOLIC DRINKS DUTIES

The Chancellor announced that:

-the duties on beer, table wine, sparkling wine and most cider are to 
 be frozen this year;
-from 6pm tonight, the duty on spirits is to cut by 4 per cent, which 
 will reduce the tax (duty plus VAT) on a 70 cl bottle by 27p;
-from 1 January 1996, the tax on fortified wine will be reduced by 
 12p for a typical 75cl bottle; and,
-from 1 October 1996, the tax on very strong cider, which is more 
 than 7.5 per cent alcohol, will be increased by 8p per pint.

The standstill on beer and table wine and the reduction on spirits 
reflect judgements based on the effects of cross border shopping and 
the pattern of recent sales.  The reduction in fortified wine 
implements the final stage of our 1992 agreement with the Spanish 
Government to reduce the differential between fortified wine and 
table wine.

The increase for very strong cider is being delayed until 1 October 
1996 to give the industry time to adjust to the change in the duty 
structure. It reflects the fact that this product is gaining 
considerable advantage from a very low duty being applied per 
unit of alcohol. However, even after this increase, strong cider 
will still face very much lower duty than similar strength beer or 
lager and there will be no increase for ordinary cider.

NOTES FOR EDITORS

1.     The new rates are as follows:



                            Old Rate            New Rate
                            Pounds per litre    Pounds per litre
                            of pure alcohol     of pure alcohol


Spirits                      20.60              19.78

Fortified wine over
22 per cent alcohol          20.60              19.78

                             Old rate           New rate
                       Pounds per hectolitre    Pounds per hectolitre

fortified wine of an         200.64             187.24 
alcoholic strength between
15 and 22 per cent

Cider above 7.5%             23.78              35.67
alcoholic strength


2.     The rates for other alcoholic drinks are unchanged, and 
are as below;

                                       Pounds per hectolitre

Beer                                   10.82 for every % of abv

Cider at or below 7.5 per              23.78 
cent alcoholic strength

Low strength wine and                 
made-wine of a strength:
 - not exceeding 4 per cent           23.41  

 - exceeding 4 per cent but           42.14
    not exceeding 5.5 per 
    cent

Table wine                            140.44

Sparkling wine                        200.64

3.     The estimated revenue cost of these changes is - 25 million 
Pounds in 1996/97 compared with a non-indexed base or - 210 million 
Pounds compared to an indexed base.  The RPI impact is estimated to 
be -0.03 per cent (non-indexed) and -0.11 per cent (indexed).

4.     A Compliance Cost Assessment for the change in duty structure 
for cider (reference CCA 5/95) is available from David Lonsdale, CDG, 
8th floor C, HM Customs and Excise, New King's Beam House, 22 Upper 
Ground, London, SE1 9PJ (Tel No: 0171-865-5570).

5.     Details for the trade are available in Budget notices BN 4/95 
and BN 121/95.



ISSUED BY:  HM CUSTOMS AND EXCISE,
            PRESS AND INFORMATION OFFICE,
            NEW KING'S BEAM HOUSE,
            22 UPPER GROUND, 
            LONDON, SE1 9PJ

TELEPHONE:  0171 865 5468/5470/5471

FAX:        0171 865 5625/5667