Cost of wine and beer hits record high

The price of wine and beer is soaring at record rates because of tax rises and fewer supermarket deals, it is revealed today.

Inflation figures show that the cost of "alcoholic beverages and tobacco" was 9.8 per cent higher last month than a year ago, the biggest jump since detailed records were first collected in 1997.

Experts said the rise was almost entirely down to the rocketing cost of drink. It comes at the same time as an unprecedented squeeze on families as shop prices, taxes, and frozen pay are all contributing to reduced household income.

The increase has affected alcohol prices in bars and shops, leading to accusations that the Government is punishing consumers who want to try to escape the remorseless economic gloom. Top London bar owner Jonathan Downey said: "The government is taxing people having fun to bail us out of our deficit."

The prices of Britain's favourite New World wines from countries such as Australia, New Zealand and Chile as well as lager have been rising particularly fast because of less aggressive "aisle end" promotions in supermarkets.

The big grocery chains have been under intense pressure from health groups and the Government to curb loss leader deals thought to be contributing to alcohol abuse.

But the impact is also being felt in pubs and bars. The inflation figures also include the effect of the Chancellor's latest increase in duties in the March Budget when the price of a pint of beer rose by 4p and a bottle of wine by 15p.

The rising cost of fuel, which affects distribution and manufacturing costs, and of raw materials such as grain, also contributes to higher drink prices.

Figures show that the average price of a pint of lager in Britain now stands at £3.08 compared with £3.02 in March. A pint of bitter average £2.70 is up from £2.64 in March. The cost of barley means further price rises for beer are inevitable this year with up to 5p more on the price of a pint.

Mr Downey of Rushmore Group, which owns a string of bars across the capital including Milk and Honey and the Player in Soho, said the price rises are causing a major problem for the capital's bar owners.

He added: "People are going out a lot less, and spending a lot less when they are out. The days of going out two to three nights a week and getting happily drunk are a thing of the past.

If they do go out, people are having a glass of wine each rather than a bottle." The price of drink helped keep the headline rate of inflation at 4.5 per cent last month, twice the Government's target.