Scrap Alcohol Tax Hikes To Prevent Fuelling Further Price Rises WSTA Says

Wine and spirit businesses are calling on Government to scrap planned duty hikes and avoid more prohibitive price rises, which will further fuel inflation.

If the Chancellor, Rachel Reeves, ploughs on with plans to increase duty by RPI at next month’s Budget, at an estimated 4.5%, consumers will be landed with further duty increases, adding 14p on a bottle of Prosecco, 16p on a bottle of red wine and 47p for a bottle of gin.

Alcohol businesses are still reeling from tax hikes introduced in February, but on top of that a costly new glass tax, known as EPR, has come into effect.

Add to this the rise in National Insurance, minimum wage hikes and reduced business rates relief, the wine and spirit sector finds itself in a perfect storm of crippling costs.

Forecast duty increases due to take effect on 1 Feb 2026 and new EPR costs, plus VAT, will have added almost a pound to a 14.5% bottle of wine or a bottle of gin at 37.5% since January 2025.

But it’s not just businesses feeling the pinch, price rises have seen a drop in alcohol sales and a reduction in revenue to the Treasury.

Recent polling, commissioned by the WSTA and undertaken by YouGov, sought to understand better consumer sentiment and behaviour.

• 72% of those that drink alcohol said that the price of alcohol in shops has increased either a lot or somewhat in the last 12 months, while 74% say the price of alcohol has increased a lot or somewhat in restaurants and pubs.
• 37% of those that have reported noticing alcohol price increases reported they are less likely to buy alcohol in shops, while that figure increases to 55% for those buying alcohol in the on-trade.

According to analysis, in effect price increases have resulted in 1 in 4 of those that drink at home being less likely to buy alcohol from retailers, while 2 in 5 that consume alcohol in pubs or restaurants are less likely to buy alcohol when they go out.

Miles Beale, Chief Executive of the Wine and Spirit Trade Association said:
“We are calling on Rachel Reeves to stop pouring away Treasury funds and scrap crippling duty hikes. Alcohol sales have been in steady decline since 2023, following the largest alcohol tax hike for 50 years.

Instead of bringing in more cash to plug the black hole in public finances the Government is reducing tax take and fuelling inflation, pushing up prices by a pound or more in a little over a year for wine and spirit consumers.

National Insurance and minimum wage hikes as well as reduced business rates relief are adding to the red tape which is stifling British business and further tax rises would be the final nail in the coffin for many businesses that are struggling to stay afloat.

The only way to break the cycle of tax duty increases penalising cash-strapped consumers, depleting Treasury funds and fuelling inflation is to freeze excise duty on wines and spirits at the November Budget.”