Isle of Man residents may notice the cost of a drink creeping up when visiting pubs, bars and restaurants following an increase in alcohol duty introduced this month.

New UK Government duty rates came into force in February, applying a 3.66% rise across all types of alcohol, in line with inflation.

Although the Isle of Man Government sets its own taxes in many areas, alcohol duty is aligned with the UK under a long-standing Customs and Excise Agreement.

The arrangement means the island applies the same duty rates as the UK on goods such as alcohol, tobacco and fuel, helping to avoid price differentials and cross-border distortion.

As a result, changes to UK alcohol duty are automatically reflected in the Isle of Man, even though the island is not part of the UK.

Whether customers will see those increases reflected in pub prices depends on individual operators, with businesses free to decide whether to absorb the additional costs or pass them on.

Some venues have opted not to raise prices.

A spokesperson for Douglas pub Grain and Vine, which also operates The Front Porch, said the business would be holding its draught prices despite the increase.

They said: ‘Once again we’re seeing rising costs across the industry – this time through increases in beer duty, which directly affects draught products.

‘We’ve been streamlining the business as much as possible behind the scenes, and we’re happy to say we won’t be passing these increases on to you.

‘All draught prices are frozen from our current pricing structure.’

However, prices will rise at Okell’s Inns pubs across the island.

A spokesperson for the company said: ‘These adjustments are a direct result of the alcohol duty increase announced in last November’s UK Budget.’

Under the new rates, beer is now taxed at 95p per litre, cider at 48p per litre, and still wine at £3.52 per litre, with similar inflation-linked increases applied to spirits and other alcoholic drinks.

The tax hike was announced by UK Chancellor Rachel Reeves during the Autumn Budget in November.

However, the tax rise has only come into effect this month.

Reacting to the announcement at the time, Ash Corbett-Collins, chairman of the Campaign for Real Ale, said it was ‘dark days ahead’ for pubs.

‘We are bitterly disappointed that alcohol duty has been hiked,’ he added.

‘Instead of delivering a substantial cut in tax breweries pay on their beer sold in pubs, the Chancellor has made the damaging choice to hike alcohol duties, including on draught beer and cider.

‘Rachel Reeves should have taken action to recognise the benefits of drinking in community locals by slashing tax specifically on pints in pubs by up to 50% to help them compete with cheap supermarket alcohol.

‘This extra hike in taxes on drinking in the pub can only risk more pubs and breweries being lost to the communities they serve.’