UK drinks trade group urges ministers to scrap a planned 2.9% alcohol duty increase

A British drinks industry group has urged the government to drop any plan to raise alcohol duty in the Autumn Budget, arguing that another increase would add to pressure on consumers and on businesses already dealing with weak sales and higher costs.

The Wine & Spirit Trade Association, which represents companies across the wine and spirits trade, said alcohol duty is expected to rise in line with the retail price index at 2.9%. The group said such a move would continue a tax approach that it believes has hurt demand without delivering the revenue gains ministers want.

The debate comes at a sensitive moment for the UK beverage market. Any new duty increase could affect shelf prices and margins for producers, importers, distributors, retailers, pubs, and restaurants operating in Britain, especially in categories where companies say demand has already softened since the tax system changed in 2023.

In its public appeal ahead of the budget, the WSTA said the UK already has some of the highest alcohol taxes in Europe. As one example, it said duty on a 14.5% ABV red wine has risen 49% since reforms introduced in 2023 under the previous Conservative government.

The association also pointed to weaker sales volumes since those changes took effect. According to the group, UK alcohol volume sales have fallen 8% for wine and 15% for spirits since 2023. It said those declines show the limits of repeated duty increases at a time when households and hospitality businesses are under financial strain.

Miles Beale, the WSTA’s chief executive, said UK consumers now face alcohol taxes that are roughly double the European Union average. He argued that the government has more control over alcohol duty than it does over other inflation drivers and said ministers should use the budget to stop what he described as “relentless and punishing” tax increases.

Beale said recent experience suggests that cutting or freezing excise duty can support sales, reduce costs for consumers, and bring in more revenue for the Treasury. He also said wine and spirits producers and retailers across the country are struggling to absorb earlier increases and that consumers are finding it harder to pay higher prices. In his view, another rise would place more businesses at risk.

The intervention reflects a broader lobbying effort by the alcohol trade before major fiscal announcements. Industry groups often argue that alcohol taxes affect far more than final consumer prices because duty is built into the economics of importing, storing, distributing, and selling drinks. For wine and spirits companies, even a modest percentage rise can matter because taxes are added before other costs such as freight, packaging, energy, labor, and retail markups.

The WSTA’s comments also draw attention to the political dimension of the issue. Beale said the current Labour government should not continue a tax regime that began under the Conservatives if the policy is not meeting its goals. That argument appears aimed at persuading ministers that freezing duty would not represent a break from fiscal discipline, but a change in policy direction in response to market evidence.

The UK changed its alcohol duty system in 2023, linking rates more closely to alcohol strength. Businesses in the wine trade have been especially critical of the system’s effect on still wines, many of which sit in common alcohol bands that attract higher duty than before. Traders have also said the structure adds complexity for importers and sellers, particularly when managing product ranges with small differences in strength.

Supporters of higher alcohol taxes generally argue that excise duty is an important source of public revenue and can also support public health policy by discouraging consumption. The WSTA, however, is framing the issue around affordability, demand, and commercial sustainability. Its position is that recent increases have not produced the intended benefit for the public finances and have instead weakened parts of the market.

That argument is likely to resonate most strongly in the hospitality sector, where pubs, bars, and restaurants have faced rising operating costs for several years. Drinks suppliers say those businesses have limited room to absorb new tax costs and often have little choice but to pass them on, risking lower demand. In a market where consumers remain price-sensitive, the trade body says another duty increase could lead to further volume declines.

The group’s warning also matters for businesses beyond domestic producers. Britain is a major wine-importing market, and duty changes can quickly feed through to importers, logistics providers, wholesalers, and supermarket buyers. If taxes rise again, companies may have to adjust product mixes, promotional plans, and pricing strategies. That could influence what reaches store shelves and restaurant wine lists in the months after the budget.

For now, the WSTA is asking the government for a freeze rather than a broader overhaul. Its immediate goal is to prevent the expected 2.9% rise from taking effect in the Autumn Budget. Whether ministers accept that argument will become clearer when the government sets out its tax plans, but the industry group has made clear that it sees the next decision on alcohol duty as important not only for consumers, but for the wider drinks trade and hospitality economy.