Rachel Reeves is being begged to scrap an extra tax on booze, which is impacting the price of alcohol and hurting Britain’s business community, according to leading trade associations.
The UK’s alcohol industry has urged the Chancellor to abandon proposed duty rises in the upcoming Budget, cautioning that such measures would significantly increase consumer costs and exacerbate inflationary pressures.
The Wine and Spirit Trade Association has warned Rachel Reeves that implementing the anticipated 4.5 per cent RPI-linked duty increase would result in substantial price rises across alcoholic beverages.
Under the proposed changes, consumers would face an additional 14p on Prosecco bottles, 16p on red wine, and 47p on gin bottles.
The Chancellor is being called to scrap duties on wine and spirits
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The combined effect of these measures, along with VAT, means nearly £1 will have been added to the cost of a 14.5 per cent ABV wine bottle or a 37.5 per cent ABV gin bottle between January 2025 and the projected February 2026 duty implementation.
This convergence of costs has created what the industry describes as exceptionally challenging trading conditions.
Recent consumer research commissioned by the WSTA reveals the impact of rising alcohol prices on purchasing behaviour.
YouGov polling of 2,051 British adults in early October found that 72% of alcohol consumers noticed significant or moderate price increases in shops over the past year.
The figure rises to 74 per cent for pub and restaurant prices, according to the trade associations.
These increases have altered buying patterns, with 37 per cent of consumers who noticed higher shop prices now less likely to purchase alcohol from retailers.
Notably, the impact proves more pronounced in hospitality venues, where 55 per cent of those aware of price rises report reduced likelihood of ordering drinks when dining or drinking out.
Industry representatives have voiced strong opposition to the proposed measures and are calling on the Chancellor to U-turn.
Miles Beale, the chief executive of the Wine and Spirit Trade Association, stated: “We are calling on Rachel Reeves to stop pouring away Treasury funds and scrap crippling duty hikes.
“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.”
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Angus Lilley, Managing Director at Treasury Wine Estates, warned: “Further tax increases will only deepen the pressure on the hospitality sector and patrons.
“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.”