The tax on spirit-based FABs such as Smirnoff Ice and Bacardi Breezer will be going up 13p per standard 275ml bottle, in part to fight binge drinking among young people, Gordon Brown announced in his Budget.
The rise, which includes 11p extra duty and 2p extra VAT, is likely to hasten the arrival in this country of American-style "malternative" versions of FABs, which do not contain spirits. The version of Smirnoff Ice sold in the United States, for example, has no vodka in it, and would therefore not attract the extra tax the British version now does.
Until now FABs, flavoured alcoholic beverages, also known as alcopops or PPSs, or premium packaged spirits, have been taxed at the same rate as low-alcohol wines, meaning that tax as a proportion of retail price is now lower for FABs than for any other type of alcoholic drink, in both the on and off trades.
However, the Chancellor said, any spirits-based FAB will now be taxed at the same rate as normal spirits. In a statement, the government said consumption of FABs more than doubled between 1999 and 2001. Their share of the market is now as big as cider, and is continuing to grow at a rapid rate.
The statement continued: "The government no longer believes the concessionary duty treatment for FABs can be justified, particularly given the Chief Medical Officer's recently- stated concerns about the association of FABs with binge drinking among younger people."
However, the Gin and Vodka Association attacked the measure as "a punitive levy on success and innovation".
There was good news for cider drinkers, with a duty cut of half a penny per pint. The government said the cut was made to support "this traditional and mainly rural-based industry, which now uses around half the UK's total production of apples."
Duties on normal spirits were frozen for the fifth budget in succession, while duties on wine and beer produced by larger brewers was also frozen, for the second Budget in succession.
The rise, which includes 11p extra duty and 2p extra VAT, is likely to hasten the arrival in this country of American-style "malternative" versions of FABs, which do not contain spirits. The version of Smirnoff Ice sold in the United States, for example, has no vodka in it, and would therefore not attract the extra tax the British version now does.
Until now FABs, flavoured alcoholic beverages, also known as alcopops or PPSs, or premium packaged spirits, have been taxed at the same rate as low-alcohol wines, meaning that tax as a proportion of retail price is now lower for FABs than for any other type of alcoholic drink, in both the on and off trades.
However, the Chancellor said, any spirits-based FAB will now be taxed at the same rate as normal spirits. In a statement, the government said consumption of FABs more than doubled between 1999 and 2001. Their share of the market is now as big as cider, and is continuing to grow at a rapid rate.
The statement continued: "The government no longer believes the concessionary duty treatment for FABs can be justified, particularly given the Chief Medical Officer's recently- stated concerns about the association of FABs with binge drinking among younger people."
However, the Gin and Vodka Association attacked the measure as "a punitive levy on success and innovation".
There was good news for cider drinkers, with a duty cut of half a penny per pint. The government said the cut was made to support "this traditional and mainly rural-based industry, which now uses around half the UK's total production of apples."
Duties on normal spirits were frozen for the fifth budget in succession, while duties on wine and beer produced by larger brewers was also frozen, for the second Budget in succession.
