Wine and spirits producers in the UK have criticised the Government’s move to increase duty rates from next year.
In its Autumn Budget, the Government said it will raise duty rates on alcohol in line with the Retail Price Index in order “to maintain its real terms value”.
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The duty hike comes into force on 1 February.
According to the Wine and Spirit Trade Association, the Treasury has confirmed to its CEO that the RPI has been set at 4.55%.
In a statement, the trade body said this will mean the tax will add 14p to a bottle of Prosecco, 18p to a 14.5% abv bottle of red wine and 49p to a bottle of gin.
Miles Beale, chief executive of the WSTA, said: “It’s a breath-taking hike. No-one will be toasting this record breaking 4.55% RPI increase on top of rising inflation – most of all British consumers who will be paying for this.
“Instead of providing breathing space in a cost of living crisis the Chancellor’s alcohol tax hikes will further suffocate British business and serve up nothing for consumers.
Beale added: “If Government is serious about providing growth in every postcode it has to stop piling on the pain for businesses and consumers across the country and show its support to the UK drinks sector.”
The chief executive of the Scotch Whisky Association, Mark Kent, described the duty hike as “a disappointing blow” to the Scotch industry, “its supply chain and the local communities it supports”.
“Another duty increase – the fourth in as many years – will see the tax burden on the average bottle of Scotch Whisky rise to 74%,” Kent added.
Chancellor John Healey told the House of Commons that he was providing a £10m duty relief “for around 2,000 small British brewers and British cider makers”.
According to the 2026 Budget documents, the Government will raise the relative value of the Small Producer Relief “compared to the main rates”, and looks to move “to a more generous discount taper” for drinks under 3.5% abv.
It is also uprating the marginal discount for goods that are between 3.5% and 8.4% ABV “by RPI plus an additional 10%”.
The Budget also included a plan to introduce a ‘guest beer’ provision into the England and Wales Pubs Code, which “will support brewers to continue to gain access to the market, whilst giving consumers a greater choice of beers available at the pub”, the document said.
Andy Slee, chief executive of the Society of Independent Brewers and Associates (SIBA), said the Chancellor had delivered “on expanding access to pubs and improves the generosity of Small Producer Relief”.
He added: “This relief is used by small independent breweries to invest in their businesses, expand and compete against the global brewers that dominate the sector and today’s announcement will give them a vital boost.
Commenting on the ‘guest beer’ provision, Slee said: “The right to a guest beer will permit landlords in large pub company pubs in England and Wales to sell what customers want, which is a great tasting local beer.”
He added: “It is welcome to see positive changes to Small Producer Relief as it applies to lower strength beer. Small breweries were previously largely locked out of the growing market for lower strength beers because of a quirk of the alcohol duty system.
“By improving Small Producer Relief for them too, it will enable brewers to respond to changing tastes and produce more lower strength beers that don’t compromise on flavour.”
The SWA’s Kent noted that more support has been provided to small brewers and cider producers, “excluding” small producers in spirits, “which is hugely important to the Scottish economy”.
He added: “The fact remains that consumers who don’t choose to drink pints – and the hospitality businesses who rely on spirits as part of a diverse and modern offering – are being unfairly penalised.”
