UK Budget confirms alcohol duty rise

The UK wine industry has reacted with concern after Chancellor Rachel Reeves confirmed that alcohol duty will rise with RPI inflation from 1 February 2026, as set out in the official Budget 2025 policy paper. The government says the increase is intended to maintain the “real-terms value” of duty while balancing the economic contribution of alcohol producers with its role in reducing alcohol harm. Small Producer Relief will also be uprated to maintain proportional support for eligible producers.

WineGB expressed disappointment, warning that the rise comes at a time when consumer confidence is fragile and domestic producers face mounting costs. CEO Nicola Bates said another duty increase threatens rural jobs, tourism and investment, adding that wine producers still struggle to access meaningful relief under the current system.

The Wine and Spirit Trade Association (WSTA) echoed these concerns. Chief executive Miles Beale called the move “disappointing and shortsighted”, arguing it “will only prolong the economy’s doom loop”. Despite evidence that previous tax rises have reduced revenue, he said the Treasury is “pressing ahead with its ill-founded plan”.

Under today’s duty system, still wine between 8.5% and 22% ABV is taxed at £29.54 per litre of pure alcohol. With the RPI inflation this will rise to about £30.62 per litre. With RPI set at 3.66% duty will go up by 11p on a bottle of Prosecco, 13p on a bottle of red wine and 38p for a bottle of gin from 1 February next year.

Overall, sentiment across the wine trade remains bleak as higher prices and tighter margins loom for 2026.