Alcohol contributes £3 in every £100 of inflation rises
New research from the Scotch Whisky Association (SWA) has found that alcohol has significantly contributed to inflation in the UK during 2025.
Its research is based on figures from the Office for National Statistics (ONS) that show that alcoholic beverages alone accounted for £3 (US$4) in every £100 (US$132) of inflation rises in the year to August 2025.
The Scotch and wider UK spirits industry has been calling for the chancellor to scrap alcohol tax rises that would increase inflation.
Alcohol duty in the UK has been linked to the retail price index (RPI) since February 2025.
The SWA’s research predicted that for every 1% increase in alcohol duty announced in the upcoming Budget, government borrowing costs will rise by £90m (US$118.9m) next year.
It argued that supporting the UK spirits industry with action will save the public purse more than £300m (US$396.5m).
Recent figures show inflation has remained at 3.8%, with the SWA stating that excise duty is one of the few ways that the UK government can directly impact it.
HM Treasury figures revealed that revenue from spirits duty was down by 17% in September compared with the same time last year.
Mark Kent, chief executive of the SWA, said: “The numbers are compelling: increasing alcohol duty drives up prices for consumers, it drives down business confidence, and dries up public finances. The chancellor herself has said she’s not satisfied with the recent inflation levels, and this research shows just how much the soaring spirits tax contributes to those figures.
“The wide-ranging support we’ve seen across a variety of sectors for action on spirits duty is testament to the damage that multiple duty hikes do to businesses’ growth prospects and stability.
“A freeze on excise duty in the Autumn Budget will not only give businesses confidence in their domestic market, but will take pressure off consumers in the run-up to the festive season, and cut Treasury borrowing costs in 2026 and beyond.”
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