John Healey announces £10million alcohol duty relief in boost for British high streets

Presenting the package alongside broader tax cuts aimed at high street businesses, Mr Healey told the Commons: “For those who feel like celebrating tax cuts for our high streets, I’m providing a £10m alcohol duty relief for around 2,000 small British brewers and British cider makers.”

The Treasury confirmed the relief would be delivered on a yearly basis, offering a financial boost to thousands of smaller alcohol producers operating across the country.

Under the revised scheme, drinks with an alcohol content below 3.5 per cent ABV will qualify for a larger discount than before.

For products falling between 3.5 and 8.4 per cent ABV, the marginal relief rate will be lifted by RPI inflation plus an extra 10 per cent, with both changes taking effect from 1 February 2027.

The Budget also included plans for a new “Guest Beer” provision within the Pubs Code covering England and Wales.

This reform is designed to allow tied pub tenants more freedom in choosing which beers they serve.

The Government said the provision would simultaneously open doors for smaller brewing companies seeking to reach new customers, while giving pub-goers a wider selection of drinks at their local.

Beyond the targeted relief for small producers, however, the Budget documents revealed that broader alcohol duty rates will increase in line with RPI inflation from 1 February 2027.

Reports circulating before the announcement had suggested duty could climb by 3.9 per cent, which would add roughly 2p to the tax on a pint of beer.

The British Beer and Pub Association had urged ministers to freeze beer duty and expand the draught duty discount, pointing out that UK brewers already shoulder some of the highest duty rates on the continent.

Chief executive Emma McClarkin had argued that a freeze combined with greater draught relief would deliver “more affordable pints, greater investment, and more jobs”.

UKHospitality chief executive Allen Simpson cautioned that headline duty rises risk pushing drinks prices higher, even though pubs do not pay the duty directly.

The Society of Independent Brewers and Associates welcomed the announcements warmly. Chief executive Andy Slee said the changes would enable independent brewers to put more money back into their businesses and gain better access to pub customers.

“Fans of indie beer will be toasting the Chancellor’s big pledge for small breweries tonight as he delivers on expanding access to pubs and improves the generosity of Small Producer Relief,” Mr Slee said.

He highlighted that independent brewers are currently locked out of around 62 per cent of pubs in their local areas due to restricted market access, despite eight in ten beer drinkers expressing a desire to see local options on the bar.

“This new right to a guest beer and the extra relief support will hopefullysupercharge this revolution, helping them to grow and thrive,” he added.

Mr Slee also praised the enhanced relief for lower-strength products, noting it would help smaller brewers compete in a growing segment of the market.

Not everyone in the drinks industry shared that enthusiasm. Miles Beale, chief executive of the Wine and Spirit Trade Association, condemned the decision to raise duty in step with inflation.

“No-one will be toasting yet another RPI increase on top of rising inflation,” Mr Beale said. “Instead of providing breathing space in a cost of living crisis the Chancellor’s alcohol tax hikes will further stifle British business and serve up nothing for consumers.”

Mr Beale contended that raising alcohol duty was not generating additional revenue for the Treasury, while simultaneously driving business closures and inflating prices for consumers.

He called on the Government to halt further duty increases and engage with those bearing the brunt of the policy, warning that the measures were heaping yet more pressure on businesses and consumers nationwide.