Another planned increase to alcohol tax at the Autumn Budget will be a major blow to businesses and consumers, who are already “on their knees”, the Wine and Spirit Trade Association (WSTA) has warned.
Writing to the new Chancellor of the Exchequer the WSTA has highlighted that previous Governments’ flawed attempts to raise revenue with a series of duty hikes have been the death nail for many struggling businesses, who are a vital source of employment across the UK.
Last month data published by the Office of National Statistics (ONS) revealed that almost 1 million (981,000) young people aged 16 to 24 were not in education, employment or training, or NEETs, between April and June 2026 – up 26,000 on the previous year.
The WSTA – the UK’s largest drinks trade association – is asking Andy Burnham’s Government to take a fresh look at plans to increase alcohol duty, by RPI, following a drop in sales.
Instead, it is calling for the Treasury to “be bold and try a different approach” and cut alcohol duty to help boost British businesses, create jobs across the UK, give consumers a break from further price rises and increase Treasury funds.
When a new excise duty regime was introduced in 2023, spirit duty increased by over 10% and the duty on the vast majority of still wine sold in the UK increased by at least 20%. Since then, British consumers have had to swallow two further duty hikes and seen further price rises with the introduction of wine being taxed according to its strength.
The impact of the repeated duty increases has caused a dip in sales as consumers can no longer afford to treat themselves. Over the last three financial years, since 2022/23, spirit volumes are down 15.3%, still wine volumes are down 8% and fortified wine volumes are down by over 22%.
This data directly contradicts consistently over-optimistic forecasts by the Office for Budget Responsibility (OBR), which Treasury uses to argue increasing taxes on alcohol brings in more funds to the public purse.
Despite repeatedly hitting consumers for more cash for their tipples, excise duty receipts were lower in 2025/6 than in 2022/23.
Miles Beale, Chief Executive of the Wine and Spirit Trade Association, said: “Businesses are on their knees thanks to years of painful alcohol tax hikes. Add to that the other Government imposed costs including business rates, escalating employment outlays, EPR and DRS packing taxes – the current outlook is dire for the alcohol industry.
History has shown that putting up taxes on alcohol is a flawed revenue raising tactic and instead is a death nail for many businesses up and down the country, particularly SMEs. Consumers cannot afford to keep up with the price increases, which are delivering for no-one.
As a sector that employs over 400,000 people – of which 60% work in the hospitality sector – the irreparable damage is running deep. We can only hope that the new PM and his Treasury are willing to listen to sound business arguments, be bold and try a different approach and cut alcohol duty at the Budget. And, in a way, it’s simple: cut duty and grown revenue to repair the public finances.”
If the Chancellor, John Healey, ploughs on with plans to increase duty by RPI at next month’s Budget, at an estimated 2.9%, consumers will be landed with further duty increases, adding 10p on a bottle of Prosecco, 11p on a bottle of red wine and 31p for a bottle of gin.
In its Budget Submission sent to the Chancellor this week the WSTA argues that cutting excise duty will help restore consumer confidence, increase sales and increase revenue to the Exchequer, while helping bring down inflation and stimulating UK businesses.
Given the pressure on the public purse, inflation and on household incomes it argues that it is in everyone’s interests – Government, industry and consumers – to maximise revenue earned and minimise costs by cutting alcohol duties.