Prices of beer, wine and spirits going up after at present’s Budget
The Chancellor has decided how much you will pay for drinks in shops, bars, pubs and restaurants
Chancellor Rachel Reeves has announced how much will be added to alcohol prices you pay in shops, bars, pubs and restaurants in the year ahead with a statement as part of today’s Budget. Alcohol tax in the UK is an excise duty paid by producers and importers, calculated based on the strength (ABV) and category of the alcohol
Rachel Reeves announced in her Budget speech that alcohol duty would rise in line with inflation. It normally rises in line with the Retail Price Index from September – which this year was 4.5%. Alcohol duty will be uprated with the RPI on 1 February 2026 to maintain its current real-terms value.
Rachel Reeves said: “The government heard representations from stakeholders ranging from a duty cut or freeze to above inflation increases. This decision balances the important contribution of alcohol producers and the hospitality sector to the UK’s culture and economy, with the duty’s role in reducing alcohol harm.”
Industry leaders had urged the Government to freeze duty in this year’s Budget, arguing members were still reeling from the tax hikes introduced in February, and the additional burden of the new glass tax. Alcohol prices are already up 5.8% on last year, according to official figures.
Last year, drinkers faced a 3.6% hike to alcohol duty, adding 54p to a bottle of wine and gin by 32p – while draught duty was cut by 1.7% – or a penny off a pint – in the 2024 Budget. Miles Beale, chief executive of the Wine and Spirit Trade Association (WSTA) said: “This Budget has been dubbed a death by a thousand cuts, and for wine and spirit businesses those cuts run deep.
“Our members are still reeling from the tax hikes introduced in February, and the additional burden of the costly new glass tax, known as EPR. Coupled with rises in National Insurance, increases to the minimum wage and business rates, it is no surprise that wine and spirit producers – along with our beleaguered hospitality sector – feel under sustained attack.
“The Government’s typically disappointing and shortsighted decision to raise alcohol duty yet again will only prolong the doom loop. Despite the OBR at last acknowledging higher prices lead to a decline in receipts, the Government fails to recognise that its own policy is driving up those prices.
“Amazingly, the Treasury continues to press ahead with its ill-founded plan to pile further duty increases on alcohol. Prices will rise once more for consumers, British businesses will suffer, and Treasury receipts will continue to fall – forecast to be £600 million lower than last year and £1 billion lower than was forecast in March.”
UK Spirits Alliance spokesman Karl Mason said: “This is a sad day for the nation’s distillers, pubs and the wider hospitality sector.
“Innovative, world-leading distillers are disappearing from communities. Three in ten landlords are scared that they will go bust within a year if costs increase; this Budget will push businesses on the brink over the edge. For all that pain, there’s no gain for the Chancellor. Successive duty hikes have already cost the Treasury billions of pounds; this third increase will limit the ability for businesses to invest, grow and create much-needed jobs.
“Today’s decision will also be felt in the pockets of the working people that this Government says it wants to support. We will continue to make our case to the Government as it looks to review excise duty next year.”
However the Alcohol Health Alliance (AHA) welcomed the Chancellor’s decision. AHA chairman Professor Sir Ian Gilmore said: “The decision to allow alcohol duty to keep pace with inflation in today’s Autumn Budget marks a welcome shift towards a more responsible approach to alcohol taxation.
“It signals recognition that maintaining alcohol duty in real terms is an important step towards bringing back an annual duty escalator at 2% plus RPI. We know that this is not only fair, but necessary, to save lives, reduce harm and protect the health of the nation.
“While parts of the alcohol industry may seek to portray this as a significant increase or a punitive measure, this is simply a return to the long-established principle that duty should rise in line with inflation, just as it does for other goods and services.
“Years of cuts and freezes by previous governments have eroded the public health benefits of this system and have created an expectation that alcohol should be treated differently.”
The duty is hugely important to the UK economy. For the financial year 2025-26, the UK’s Alcohol Duty is forecast to raise around £13billion. That amount corresponds to 1.1% of all government receipts, about £450 per household, and roughly 0.4% of national income.
According to a 2025 comparison of EU and UK excise rates across beer, wine and spirits, the UK ranks third highest overall (among all EU plus UK), behind only a few high-duty countries such as Finland and Ireland. For beer specifically: a 330 ml bottle of 5% ABV beer in the UK is taxed at roughly €0.4187 — the second-highest in the EU/UK ranking for that product after Finland.
On wine, the UK applies a significant duty, while many European wine-producing countries do not. For example, as of 2024 analysis, 15 EU member states impose zero duty on wine; many others levy only minimal amounts. Specifically, the average bottle of wine in the UK incurs around £2.35 in excise duty;
Despite periodic increases in nominal receipts, alcohol duty’s share of total government revenue has gradually fallen: from around 1.8% in 1999/00 to 1.5% in 2018/19.
Rates are set per litre of pure alcohol and vary significantly between different types of drinks, with a new system of rates introduced in August 2023. Different rates are set for beer, cider, sparkling cider, spirits and spirit-based drinks, wine, and other fermented products, as well as a specific duty for draught products.
In short, the excise duty added to the price of alcohol ranges from nothing for drinks with an ABV below 1.2%, up to £32.79 per litre of pure alcohol for drinks stronger than 22% ABV.
There are up to six levels of duty for each category of drink, getting higher for different levels of ABV.
All these figures will now go up in line with inflation – meaning how much you pay for alcohol in pubs and shops will rise.
