'This Budget is a hammer blow' as UK alcohol duty rises with inflation

Producers, trade bodies and public health groups are now setting out competing visions for what this means for drinkers, venues and the wider economy.

Alcohol duty will increase with RPI inflation from 1 February 2026, according to the official Budget 2025 policy paper. The government stated that the change aims to “maintain its current real-terms value” and said the decision “balances the important contribution of alcohol producers and the hospitality sector to the UK’s culture and economy, with the duty’s role in reducing alcohol harm” as per the document. Small producer relief will also be uprated so eligible producers maintain their relative reductions.

Miles Beale, chief executive of the WSTA, offered a typically forthright response, describing the move as “disappointing and shortsighted”. He added that raising duty “will only prolong the economy’s doom loop” and argued that “no matter how much evidence we provide showing that tax hikes don’t work for anyone, the Treasury continues to press ahead with its ill-founded plan”.

The Scotch Whisky Association expressed similar dismay. According to SWA chief executive Mark Kent, the increase places “additional pressure on a sector suffering job losses, stalled investment and business closures”. He stressed that the previous 3.65% rise had “reduced spirits revenue by 7%” which he said amounted to a £150 million loss to the Treasury. Kent described the decision to increase duty for the third time in two years as one that “will once again fail to deliver for the public purse” and warned that the government had chosen to ignore calls for “breathing room for a critical Scottish industry”.

The UK Spirits Alliance was equally severe. UKSA spokesperson Karl Mason said: “This is a sad day for the nation’s distillers, pubs and the wider hospitality sector.” He argued that “three in ten landlords are scared that they will go bust within a year if costs increase” and claimed that “successive duty hikes have already cost the Treasury billions of pounds”.

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