UK: spirits hardest hit as duty revenue falls £94m
Spirits saw the biggest revenue drop of all alcohol categories in the UK for 2025-26, falling by £94 million (US$126.9m) year on year.
According to the latest alcohol excise duty receipts from the UK government’s His Majesty’s Revenue & Customs (HMRC) authority, spirits revenue was down by 2.3% to £4.06 billion (US$5.5bn) for the 2025/26 year.
For the previous 2024-25 year, revenue equalled £4.15bn (US$5.6bn) – with the latest figures representing a decline of £94m.
A joint statement has been issued by a group of eight drinks trade bodies: English Whisky Guild, Drinks Ireland: Spirits, The Gin Guild, Irish Whiskey Association, Scotch Whisky Association, UK Spirits Alliance, Welsh Whisky Association and the Wine and Spirit Trade Association (WSTA).
They called out the “devastating impact” on the spirits industry was due to the government’s tax hike on the category in the last three years.
The first major increase came in August 2023 when duty was increased by a record-breaking 10.1%. Since then, it has risen in line with the retail price index (RPI). With RPI at around 3.66%, from 1 February 2026, duty on a 37.5% ABV bottle of gin increased by 38p.
The eight trade bodies warned the industry has suffered a 17% increase to spirits duty over the last three years.
They noted revenue was “£1.1bn lower than was forecast when the new alcohol duty system was introduced in 2023”.
The statement continued: “It is critical that HM Treasury do not turn a blind eye to the role the punitive and distortive duty rate has had on spirits revenue, in addition to job losses and investment pauses across the spirits industry.
“Spirits duty amounts to a super tax on the industry and must be urgently addressed. Pubs and the wider hospitality industry cannot survive on beer alone, yet hard-pressed consumers are being forced to pay over the odds to responsibly enjoy premium spirits, which underpin the profitability of many bars, pubs and restaurants.”
The trade associations also called on the government to follow through with its review of the new alcohol duty system three years after it was implemented.
“We welcome the launch of that evaluation, and our organisations are united in our call for the review to be as comprehensive as possible, and for the autumn Budget to take steps to support the UK’s world-class spirits industry,” the statement concluded.
In comparison to other alcohol categories, spirits saw a larger drop in revenue.
Wine closely followed spirits with a 2% decrease to £4.63bn (US$6.25bn), while beer was down by 1.9% to £3.54bn (US$4.78bn). Pubs have benefitted from draught relief since 2023 but beer sold in the off-trade is still subject to a duty increase.
Cider revenue, on the other hand, soared by 33.5% to £295m (US$398.4m) in 2025-26 from a much lower base.
Collectively, alcohol excise duty receipts dipped by 1.4% to £12.4bn (US$16.7bn).
WSTA: ‘Clear opportunity’ to rethink duty
Miles Beale, chief executive of the WSTA, also highlighted that the tax rises result in a drop in consumer demand for wine and spirits.
“Not only do wine and spirit drinkers pay the highest rates of excise duty and contribute the lion’s share (c.70%) of all alcohol duty receipts to the public purse, they have also been hit hardest by the UK’s uniquely punitive excise duty regime,” he noted.
“With every new set of data we see clearly that increasing duty rates year-on-year reduce consumer demand and income to the Exchequer. Combined wine and spirit duties were £188m [US$254m] lower in 2025/26 than in 2024/25.
“But there’s a chance to stop the ‘drip, drip, drop’: the government’s recently announced evaluation of the 2023 duty provides a clear opportunity for a major rethink as part of the 2026 autumn Budget.”
Trade groups have previously called on the government to extend its Small Producer Relief scheme, which provides lower alcohol duty rates, to the spirits industry. Currently it only benefits small producers making alcoholic products below 8.5% ABV.
Earlier this year, The Spirits Business explored whether the industry can survive another tax increase.
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