Pubs Brace for Potential Duty Increase as Budget Approaches

Proposed alcohol duty increase could add 2p to a pint as debate over pub drinking policies intensifies.

Pub operators are facing renewed concerns over rising costs after reports that Chancellor John Healey is expected to increase alcohol duty in line with inflation in the forthcoming Budget, potentially adding around 2p to the cost of a pint.

The reported move comes as the Government prepares to set out its fiscal plans on Wednesday 28 October, with hospitality businesses continuing to call for meaningful support amid mounting financial pressures.

The anticipated duty increase would follow the decision to link alcohol duty to inflation, with rates rising by 3.66% in February 2026. The latest reported proposals suggest a further increase could take the duty element on a typical pint of beer from approximately 50p to 52p, although the final impact on prices will depend on how the changes are applied and whether businesses pass the additional cost on to customers.

Any increase would add to the challenges facing pubs, which continue to contend with higher staffing, energy and other operating costs, alongside pressure on consumers’ disposable incomes.

The industry has been urging the Government to consider measures that would encourage customers to drink in pubs rather than purchase alcohol from supermarkets, where prices are often lower.
Calls for meaningful support

Hospitality organisations have repeatedly called for changes to taxation and business costs to help protect venues and support employment.

UKHospitality has argued for a reduction in VAT on hospitality sales from 20% to 10%, while the British Beer and Pub Association has called for further action on beer duty to improve the competitiveness of the pub trade.

Operators are looking to the Budget for further detail on business rates and additional measures to help address the sector’s wider cost pressures.

Figures from the British Beer and Pub Association indicate that 295 pubs closed permanently during the first nine months of 2026, with the organisation warning that the total could reach 360 by the end of the year without further intervention.