Alcohol Duty Increase 3.66% from Feb 1: UK Gin, Whisky, Wine Prices to Rise for Shoppers

The UK government will increase alcohol duty by 3.66 per cent from Sunday, February 1, 2026, following the autumn budget announcement in November 2025 by Chancellor Rachel Reeves. The rise affects all producers of spirits, wine, and beer, with duty linked to the Retail Prices Index. Official figures indicate that a 37.5 per cent ABV bottle of gin will see an increase of 38p to £8.98 including VAT, Scotch whisky at 40 per cent ABV will rise by 39p to £9.51 per bottle, and a 14.5 per cent red wine will cost an additional 14p. The measure comes as trade bodies warn the sector faces mounting costs. The WP Times reports, with supporting information from the GOV.UK.

Mechanism and Scope of the Alcohol Duty Increase

The duty hike applies to producers, not retailers, with costs expected to be passed to consumers. Chancellor Reeves confirmed the adjustment in the November 1, 2025 autumn budget, explicitly linking the rise to Retail Prices Index inflation. This is part of an ongoing annual adjustment under the current taxation system, introduced in August 2023, which adjusts duties according to alcohol strength for wine and spirits.

The Treasury calculates the duty impact as follows:

The adjustment affects all producers across England, Scotland, and Wales. Northern Ireland follows the same framework under HM Revenue & Customs oversight.

Industry Response: Price Transmission and Capacity Limits

Trade bodies representing wine and spirits businesses have raised concerns that producers lack the capacity to absorb additional costs. The Wine and Spirit Trade Association (WSTA) reported that tax on a 14.5 per cent bottle of red wine has already risen by £1.10 since August 2023.

Miles Beale, WSTA Chief Executive, stated that the current system’s structure has increased administrative complexity, particularly for wine taxed by strength. Rising national insurance contributions, business rates, and packaging taxes compound the cost pressures. Beale emphasized that firms will inevitably pass costs to consumers to remain solvent.

The UK Spirits Alliance, representing hundreds of distillers, has formally requested a long-term strategic framework from the government, citing “spirits discrimination” under the current duty system.

Immediate Consumer Impact and Timing

The timing of the increase coincides with the end of dry January, meaning consumers returning to social drinking from February 1 will encounter higher prices.

Braden Saunders, spokesperson for the UK Spirits Alliance, highlighted that the timing will be felt immediately in retail and hospitality venues. He emphasized that successive governments have treated the sector as a “cash cow,” with successive duty rises transferring the fiscal burden directly to consumers.

Support Measures for Hospitality Venues

In response to sector concerns, the government announced targeted support for pubs under a new business rate relief package. Every pub in England will receive a 15 per cent discount on their updated business rates bills from April 2026, with rates then frozen for two years.

Exchequer Secretary Dan Tomlinson stated the measure would be worth approximately £1,650 to the average pub next year, ensuring roughly 75 per cent of venues see bills remain unchanged or fall.

Additionally, licensing rules for hospitality venues will be relaxed ahead of the 2026 World Cup to provide operational flexibility during peak trading periods.

Financial and Fiscal Implications

Official forecasts suggest that the cumulative effect of duty increases will generate additional tax revenue for the Treasury while partially offsetting reduced receipts from rising prices, as the Office for Budget Responsibility has previously noted that higher retail prices may reduce consumption and, consequently, tax income.

The duty rise contributes to broader government fiscal planning, intended to manage inflation-adjusted revenue streams while providing targeted relief to hospitality. The sector faces a combination of increased regulatory costs, energy price pressures, and staffing challenges alongside the duty increase.

Guidance for Consumers and Businesses

Consumers can anticipate the following changes from February 1, 2026:

1. Check the ABV and bottle size when purchasing wine and spirits to anticipate duty-related price adjustments.
2. For spirits, the effective duty increase ranges from 38p to 39p per standard bottle.
3. Pubs and bars should apply new duty-inclusive pricing immediately and factor in business rate relief effective April 2026.

Businesses can access detailed duty calculators and guidance through HM Revenue & Customs: www.gov.uk/alcohol-duties.

Long-Term Considerations and Strategic Planning

Industry groups urge the government to set out a long-term duty framework to reduce uncertainty and allow operational planning. Strategic clarity would enable distillers and wine producers to adjust pricing models, supply chains, and inventory management without relying on ad hoc increases.

Hospitality leaders, including UKHospitality Chief Executive Allen Simpson, have cautioned that price rises could impose unsustainable burdens if compounded by energy bills, staffing costs, and food inflation. Suppliers are encouraged to exercise restraint when passing on duty increases to ensure venue viability.

Regional Differences and Implementation

Duty increases apply uniformly across the UK; however, regional differences in business rates and local licensing rules may affect net operational costs for hospitality venues. For instance:

Verification and Resources

To verify duty changes or business rate relief eligibility, businesses and consumers can consult:

• HM Revenue & Customs: www.gov.uk/alcohol-duties
• Local council business rate offices for England, Scotland, and Wales
• UKHospitality guidance: www.ukhospitality.org.uk

Regular updates from the Treasury and WSTA provide real-time information for producers and venues.

The February 1, 2026 duty increase means that UK consumers and hospitality venues face higher operating and purchase costs immediately. While targeted relief measures provide partial support, the overall fiscal burden on both producers and consumers will be noticeable in pricing across bars, pubs, and retail outlets from the start of February.

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