Alcohol Duty Hike to Add Up to 38 Pence per Bottle, Sparking Industry Backlash in UK

The UK government’s decision to raise alcohol duty in line with the Retail Price Index has drawn strong criticism from the country’s alcohol producers and trade associations. The announcement came as part of the Autumn Budget, presented by Chancellor of the Exchequer Rachel Reeves to the House of Commons on November 26. The new rates will take effect from February 1, 2026.

According to the government, the increase is intended to balance the economic contributions of alcohol producers and the hospitality sector with public health goals aimed at reducing alcohol-related harm. The policy paper released alongside the budget stated that all alcohol duty rates would be “uprated” with inflation, as measured by the RPI, which currently stands at 3.66%. This means consumers will see duty rise by 11 pence on a bottle of Prosecco, 13 pence on a bottle of red wine, and 38 pence on a bottle of gin.

The government also announced an uprating of Small Producer Relief discounts, but this has done little to ease concerns within the industry. Miles Beale, chief executive of The Wine and Spirit Trade Association (WSTA), described the budget as “a death by a thousand cuts” for wine and spirit businesses. He pointed out that many producers are still struggling with tax hikes introduced earlier in February and are now facing additional costs from a new glass tax known as Extended Producer Responsibility (EPR). Beale said that combined with increases in National Insurance, minimum wage, and business rates, the sector feels “under sustained attack.” He called the move “typically disappointing and shortsighted,” warning that it would only prolong what he described as a “doom loop” for the industry.

Mark Kent, chief executive of the Scotch Whisky Association (SWA), echoed these concerns. He said Scotch whisky producers were “disappointed” by the decision and warned that it would add significant pressure to a sector already experiencing job losses, stalled investment, and business closures. Kent emphasized that continued growth in both domestic and international markets could not be expected if supportive conditions were not maintained.

Trade bodies had lobbied against any increase in duty ahead of the budget announcement. Earlier in November, organizations including WSTA, SWA, and the Society of Independent Brewers (SIBA) wrote to government officials highlighting what they described as “significant challenges” facing the sector. SIBA responded to today’s announcement by calling it “a bitter blow for beer drinkers, community pubs and small breweries.” The association criticized the chancellor for not extending draught relief—a measure that would have ensured beer sold in pubs carried a lower rate of duty—arguing that this was a missed opportunity to support an already pressured sector.

The hospitality industry has faced mounting difficulties over recent years due to rising costs, changing consumer habits, and lingering effects from pandemic-related restrictions. Many businesses have reported declining sales and increased operational expenses. Industry leaders argue that further tax increases could lead to more closures and job losses across pubs, bars, breweries, distilleries, and related supply chains.

The government maintains that uprating alcohol duty is necessary for fiscal responsibility and public health objectives. However, industry representatives warn that without targeted support or relief measures, these changes could undermine one of Britain’s most important cultural and economic sectors. As February approaches, producers and retailers are bracing for higher costs while continuing to urge policymakers to reconsider their approach.