Britain’s alcohol duty receipts fell as spirits sales weakened

The British government collected less from alcohol duty in 2025/26, with spirits taking the sharpest hit as higher taxes continued to weigh on sales and revenue across the category.

According to the latest figures from His Majesty’s Revenue & Customs, alcohol excise duty receipts fell 1.4% to £12.4 billion in the year. Spirits revenue dropped 2.3% to £4.06 billion, down £94 million from £4.15 billion in 2024/25. Wine revenue also declined, falling 2% to £4.63 billion, while beer slipped 1.9% to £3.54 billion. Cider was the only major category to post a large increase, rising 33.5% to £295 million from a much smaller base.

The decline in spirits revenue comes after a series of tax increases that trade groups say have pushed up prices and weakened demand. Duty on spirits rose by a record 10.1% in August 2023, and since then it has increased each year in line with the retail price index. With RPI at about 3.66%, duty on a 37.5% ABV bottle of gin rose by 38p on Feb. 1, 2026.

Eight trade bodies, including the Scotch Whisky Association, the Wine and Spirit Trade Association and the Gin Guild, said in a joint statement that the industry had suffered a 17% increase in spirits duty over the past three years. They said revenue was £1.1 billion below what had been forecast when the current alcohol duty system was introduced in 2023.

The groups argued that the tax regime has hurt investment and employment across the sector and said it was time for the Treasury to reconsider its approach. They also urged the government to make its review of the new duty system as broad as possible ahead of the autumn Budget.

Miles Beale, chief executive of the Wine and Spirit Trade Association, said wine and spirits drinkers pay the highest rates of excise duty and account for about 70% of all alcohol duty receipts, yet have been hit hardest by what he called Britain’s punitive system. He said combined wine and spirit duties were £188 million lower in 2025/26 than in 2024/25, adding that rising duty rates were clearly reducing consumer demand.

The figures come as pubs and bars continue to face pressure from higher operating costs and softer spending by consumers. Industry groups have argued that premium spirits remain important for profitability in hospitality venues, even as drinkers become more price-sensitive.

Beer benefited from draught relief introduced in 2023, but off-trade beer still faced higher duty costs. The latest HMRC data showed that alcohol duty receipts overall remain well above levels seen before the current tax changes, even as growth has slowed and some categories have begun to fall back.

Trade associations have also renewed calls for small producer relief to be extended to spirits makers. At present, that lower-duty scheme applies only to alcoholic products below 8.5% ABV, leaving most spirits producers outside its scope.

The latest revenue figures add fresh pressure on ministers as they prepare for another budget cycle and weigh whether further tax rises could deepen the slowdown in alcohol sales across Britain’s wine and spirits market.