Consumers returning to pubs after a month of abstinence will find higher prices awaiting them, as the Government’s 3.66 per cent excise duty increase on spirits comes into force today.
Chancellor Rachel Reeves announced the rise in her most recent Budget, adding to previous hikes of 3.65 per cent and 10.1 per cent that have left distillers and pub owners warning of an industry in crisis.
The UK Spirits Alliance, representing hundreds of distillers nationwide, has urged the Chancellor to use a forthcoming duty review to prioritise growth and end what it describes as discrimination against the spirits sector.
Britain now imposes the highest excise duty rates among G7 nations and ranks among the steepest in Europe, placing severe pressure on both producers and hospitality venues.
Polling conducted ahead of the Budget revealed that 91 per cent of landlords anticipated having to increase their prices following duty rises.
The outlook for the sector remains bleak, with 29 per cent of pub owners fearing they may be forced to close within the next twelve months. This figure represents approximately 11,000 venues across the country at risk.
Pubs are a staple of British culture
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GETTYSince the last Budget, the hospitality industry has shed 89,000 jobs, with Office for National Statistics data showing the sector accounts for nearly half of all employment losses in the economy.
The tax burden on a typical bottle of gin or whisky stands at 70 per cent, while spirits face duty rates 16 per cent higher than wine and 256 per cent higher than cider per unit of alcohol.
Carolyn Harris MP, Chair of the APPG for UK Spirits, said: “Another duty hike on spirits will now hit people who simply want to enjoy a drink after a hard day’s work. Pub owners consistently tell me that spirits are among their most profitable products – so this tax rise compounds the difficulties they’re already facing.”
She added: “Pubs are more than pints. I’m calling on Ministers to ensure that upcoming duty review is comprehensive and considers the serious pressures bearing down on this struggling industry.”
Rachel Reeves
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RACHEL REEVES / LINKEDINBraden Saunders, UK Spirits Alliance spokesperson and co-founder of Doghouse Distillery in Battersea, described the timing as deeply ironic.
“The spirits industry has been treated as a cash cow by consecutive governments, and the sector is on its knees,” he said. “We need Ministers to take us seriously and help us thrive; if not, they risk losing an industry that offers jobs and growth to local economies up and down the country.”
The UK Spirits Alliance has written to Rachel Reeves demanding that the upcoming duty review addresses the sector’s needs and establishes a long-term framework giving businesses confidence to invest.
Greville Richards, Director of Saint Sithney Distiller in Cornwall, said: “The Government says it wants to support pubs but it is simultaneously clobbering the very products that make them profitable.”
He argued that British spirits represent one of the nation’s greatest export success stories, yet producers face punishing tax rates that disadvantage them both domestically and internationally.
“Our spirits producers fly the flag for Britain around the world, creating jobs, driving tourism, and generating export revenue. Yet they’re being penalised for that success,” Richards added.
The Government has confirmed it will review excise duty later this year, though no date has been set.