UK government must ‘open its eyes’ to the spirits industry
Ahead of the spring statement this week (26 March), Nick Gillett, the managing director of Mangrove Global, has urged the government for clarity on tariffs and to leave the spirits industry unharmed.
He said: “I can’t imagine the government will backtrack on any of the punitive measures they announced in October.
“If I were an optimist, I’d like to hear suggestions of a freeze to alcohol duty, rate incentives for venues, caps on energy bills for businesses (and consumers), and maybe even a reduction in VAT. Also, any measures that put more cash in customers’ pockets are good for us.
“But I’m a realist – so I’ll settle for no new curve balls or punitive policy changes. We took a quadruple hit at the last statement – it’s somebody else’s turn.”
The Labour government’s first budget was announced in October 2024, with duty on spirits rising in line with the Retail Price Index from February 2025.
The budget also included a reduction in rates relief for hospitality businesses, a hike in employers’ National Insurance contributions and an increase in the minimum wage.
A major issue facing the UK economy at the minute is the threat of US tariffs. Gillett hopes for some clarity on the matter in the budget: “If tariffs on American spirits come into play, it’s very unlikely that distributors or brands will be able to absorb that cost – ultimately causing it to be passed on to the customer.
“At the moment, we’re stocking up on our American products to see us through any short-term tariffs that might be put in place. If they remain for the long term, that cost will be passed on to UK customers.
“If that price point rises, consumers will have a choice – to pay more, or drink something else. Obviously, this will present opportunities for similar brands, and we’ve seen success stories born out of being an alternative to brands that have raised their prices for whatever reason.
“With my optimist’s head on, I don’t think it will come to that – American spirits businesses are doing some incredible things, global markets are important to that success, and it would be crazy of the American government to penalise businesses like that.”
Another issue Gillett hopes will be addressed in the budget is a delay to the Extended Producer Responsibility for Packaging (EPR) scheme. The initiative is set to begin on 1 April and will hold producers accountable for packaging waste.
He said: “I am confident that the majority of the spirits and hospitality industries want to do the right thing when it comes to the environment. But the EPR scheme in its current form is going to drive more businesses back to single-use plastic which, given all that we know, is absolute madness.
“Add into the mix that we also have the Deposit Return Scheme expected in Scotland from 2027 and that’s a difficult regulatory environment for national businesses to navigate. It would be sensible for all governments to pause and talk to us – get it right before they go ahead.”
Despite the challenges, Gillett remains optimistic for the industry: “In spite of all the doom and gloom, we’re seeing pockets of growth across the industry. And while it might not be substantial, it shows the buoyancy of the sector. We’re resilient, we’re entrepreneurial, and because of that, we’re not going anywhere.
“I’ve said before that when the UK looks after its hospitality industry, the country thrives. It drives employment, it gets people spending – and, because we’re taxed so heavily, it lines the pockets of the government.
“We’ve been hammered over the past few years, but the winter’s over now, nights are lighter, and across the country, there are pockets of success that we can all learn a lot from. Our government included – if they’d open their eyes.”
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