The UK spirits industry is bracing for a significant shift as alcohol duty increases by 3.66% on February 1, 2026. This announcement, part of the national budget, will directly impact the price of a wide range of spirits, including gin, whisky, and wine. Let’s break down what this means for consumers and the industry itself.
Why the Hike?
The government’s decision to increase alcohol duty reflects a broader effort to bolster public services through revenue generation. This action aligns with reports from Forbes and GOV.UK, signaling a sustained commitment to this approach.
Impact on Consumers: Rising Prices on Shelves
Consumers can anticipate a noticeable rise in the cost of their favourite spirits. Preliminary calculations estimate price increases of around 38p for a standard bottle of gin, increasing it to £8.98 including VAT. Scotch Whisky will see a price increase of 39p to £9.51 per bottle, while red wine is expected to rise by 14p. These figures are based on current ABV and bottle sizes and are subject to change.
Industry Reaction: Producers Face Increased Costs
The industry’s response has been largely critical. Trade bodies, including the Wine and Spirit Trade Association (WSTA), have repeatedly stated that producers cannot absorb these increased duty rates. The UK Spirits Alliance is advocating for a long-term framework, arguing that the sector has been treated as a ‘cash cow’ resulting in successive duty increases passed directly onto consumers.
Support Measures and Industry Calls
While the duty hike is unavoidable, the government has announced some mitigation measures. A 15% discount on business rates for pubs, frozen for two years, will provide an average relief of £1,650 for the average pub. Furthermore, relaxed licensing rules will be in effect during the 2026 World Cup. However, industry groups continue to urge the government to establish a long-term duty framework to provide stability and predictability for producers.
What You Need to Do: Preparedness is Key
As consumers, staying informed is crucial. Check the ABV (Alcohol By Volume) and bottle size of your favourite spirits to anticipate duty-related price adjustments. Pubs and bars need to factor these new duty-inclusive pricing models into their operations. Businesses can access duty calculators and detailed guidance through HM Revenue & Customs: [www.gov.uk/alcohol-duties](http://www.gov.uk/alcohol-duties).
Timeline of Key Dates
* February 1, 2026: Alcohol duty hike takes effect
* April 2026: Business rate discount on pubs starts
* 2026 World Cup: Relaxed licensing rules come into force
Long-Term Considerations
The spirits industry’s future depends on a stable and predictable duty framework. The current trajectory raises concerns about the long-term viability of some producers and could lead to further price increases for consumers.
