Price of alcohol set to rise again unless new Chancellor John Healey freezes tax hike

Price of alcohol set to rise again unless new Chancellor John Healey freezes tax hike This year, drinkers were hit with a 3.66% increase - but the Wine and Spirit Trade Association (WSTA) warns it could go up again by another 2.9% John Healey has been urged not to increase alcohol duty in his Budget next month, with a leading drinks group warning that pubs and consumers are already "on their knees". Alcohol duty is normally increased every year in line with the Retail Price Index (RPI) measure of inflation. The tax is directly levied upon alcohol producers, but is then normally passed down to consumers in the price they pay. This year, drinkers were hit with a 3.66% increase - but the Wine and Spirit Trade Association (WSTA) warns it could go up again by another 2.9%. The group estimates this would add 10p on a bottle of prosecco, 11p on a bottle of red wine and 31p for a bottle of gin. Writing to the new Chancellor, the WSTA said previous duty hikes have been "the death nail" for many struggling businesses. It also argues that repeated increases has caused a dip in sales as consumers can no longer afford to treat themselves. The group says that over the last three financial years, spirit volumes are down 15.3%, still wine volumes are down 8% and fortified wine volumes are down by over 22%. Miles Beale, Chief Executive of the Wine and Spirit Trade Association, said: “Businesses are on their knees thanks to years of painful alcohol tax hikes. "Add to that the other Government imposed costs including business rates, escalating employment outlays, EPR and DRS packing taxes - the current outlook is dire for the alcohol industry. “History has shown that putting up taxes on alcohol is a flawed revenue raising tactic and instead is a death nail for many businesses up and down the country, particularly SMEs. Consumers cannot afford to keep up with the price increases, which are delivering for no-one.“ According to HMRC data, alcohol duty receipts totalled £12.4billion in the financial year ending April 2026, up from £7.9billion in 2006 to 2007. They hit a peak of £13.1billion during the 2021 to 2022 financial year, largely driven by an increase in off-trade consumption due to the Covid lockdown. A Treasury spokesperson said: “The Chancellor is fully focused on his priorities, to boost business, help with the cost of living and support people in every postcode. “As has always been the case, the Chancellor will set out decisions at fiscal events, rather than routinely commenting on rumour, speculation or proposals."