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.
The polling, carried out on 2nd and 3rd October, sampled 2051 GB adults.**
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 our 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.”
Global premium and luxury wine company Treasury Wine Estates, who are the creators of brands like 19 Crimes and Penfolds, said that further tax increases will only deepen the pressure on the hospitality sector and patrons. The Company’s Managing Director of global premium brands, Angus Lilley said:
“Across the UK, community pubs, restaurants and wine retailers are already feeling the strain from rising costs – from recent National Insurance hikes to persistent inflation. Further tax increases will only deepen the pressure.
Higher costs mean tougher choices for local pubs, higher prices on the menu, and less money flowing through the hospitality sector that keeps towns and cities vibrant.
From hospitality and retail to the broader supply chain, TWE takes pride in supporting jobs and contributing to the UK economy. Ahead of the Budget, we urge the Chancellor to choose stability: freeze alcohol duty and back a plan that keeps prices fair, sustains employment, and supports long-term industry growth.
Anything less risks making it harder for the hospitality sector to stay accessible and affordable for consumers already managing rising costs of living.”
Ed Cottrell, CEO of Fortitude Spirits, said:
“Another Duty hike on top of last year’s highest for 50 years, combined with EPR and higher employment and energy costs, is choking UK based Spirits’ manufacturing businesses. The result will be fewer companies operating and employing in the UK, a disaster for what was a buoyant industry in 2019″.
Notes:
* 94p to the price of a 14.5% wine and 96p to a bottle of gin at 37.5% abv when compared to 31 January 2025 – assuming the weight is 500g glass bottle for the wine and 600g for the gin.
**All figures, unless otherwise stated, are from YouGov Plc. Total sample size was 2,051 adults. Fieldwork was undertaken between 2nd – 3rd October 2025. The survey was carried out online. The figures have been weighted and are representative of all GB adults (aged 18+).
The table below shows examples of duty increases for popular mid-priced brands available in a UK supermarket based on a 4.5 RPI increase:
| Volume (l) | ABV | Duty now | Price now (£) | Duty RPI uplift | Price with duty increase | Price change | |
| Red Wine (Merlot) 13.5% abv, 75cl | 0.75 | 13.5 | £2.99 | £8.50 | £3.13 | £8.66 | £0.16 |
| White Wine (Sauvignon Blanc) 11% abv, 75cl | 0.75 | 11 | £2.44 | £8.25 | £2.55 | £8.38 | £0.13 |
| Gin 37.5% abv, 70cl | 0.7 | 37.5 | £8.60 | £19.00 | £8.99 | £19.47 | £0.47 |
| Scotch Whisky 40% abv, 70cl | 0.7 | 40 | £9.18 | £18.00 | £9.59 | £18.50 | £0.50 |
| Vodka & Diet Cola RTD, 5% abv, 25cl | 0.25 | 5 | £0.32 | £2.15 | £0.34 | £2.17 | £0.02 |
| Prosecco 11% abv, 75cl | 0.75 | 11 | £2.43 | £12.50 | £2.55 | £12.64 | £0.14 |
| Lager 4.6% abv, 4x330ml cans | 1.32 | 4.6 | £1.32 | £6.00 | £1.38 | £6.07 | £0.07 |
| Cider 4.5% abv 4x330ml cans | 1.32 | 4.5 | £0.59 | £5.25 | £0.62 | £5.29 | £0.04 |
In comparison French consumers pay just 0.03 Euros for a bottle of wine, in Spain they do not pay any excise duty on a bottle of wine.
