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UKSA writes letter to Chancellor bemoaning gin duty rises

The 1 February increases, announced in last year’s autumn Budget, will hit gin with a 3.65% duty increase in line with RPI inflation. This follows the previous government’s 10.1% increase in alcohol duty introduced in August 2023.

• Read more: American whiskey shipments brought forward to protect against tariffs

Kathy Caton MBE, founder & MD of Brighton Gin, is urging the Chancellor to listen to the gin trade’s concerns and change course.

She said: "Brilliant British entrepreneurs who, through guts and graft, have created businesses producing world-beating products that consumers love are being seriously let down by this government, and the ones before it.”

“Instead of celebrating a British business success story, successive Chancellors have chipped away at the spirits sector and the 1 February tax increase could be the final nail in the coffin for many.

“For many distillers and their staff this extra burden may be the end, seeing the closure of great local and community businesses that have provided employment – and ironically seeing lower contributions to the Treasury"

A survey of distillers following 2023 duty increases found that 70% of UK distilleries are in fear of their ability to invest in their business. Another poll of pubs conducted ahead of the 2025 duty rise, found that one in four have a distiller supplier that has gone out of business.

Letter sent to the Chancellor of the Exchequer

Dear Chancellor,   

On the 1^st February, excise duty on spirits will increase by 3.65% as announced in your Autumn Budget. This increase comes on top of a 10.1% increase brought in by your predecessor in August 2023.

On behalf of over 200 whisky and gin makers alongside hospitality businesses across the UK, we are writing to you of our concerns, that instead of celebrating a iconic British success story, you are in danger of crushing it.

At the UK Spirits Alliance, we do all we can to highlight the sector’s contribution – it supports over 446,000 jobs and contributes £13 billion to the UK economy. It doesn’t just create jobs and income for the Treasury – it also supports the country’s vital cultural and tourism hobs, bringing in thousands of visitors each year.

Spirits also leads the pack in terms of Britain’s greatest exports. Scotch Whisky alone makes up 22% of all UK food and drink exports. Small English gin producers across the UK are now internationally renowned brands and major exports in their own right.

Batch distillery, based in Burnley Lancashire, is a great example of this. Starting out making spirits in the basement of their terraced house, it has now upscaled to a local renovated mill in the same town. Batch now supplies bars and restaurants across the UK, retailers like Selfridges and has started exporting to the US and India.

But following the 2023 duty increase, a survey of distillers showed that 70% of distilleries in the UK feared for their ability to invest in their business as a result of recent duty increases.  A more recent poll of pubs – ahead of the 2024 increase – showed that 1 in 4 have a distiller supplier that has gone out of business.

Meanwhile spirits drinkers are being priced out of pubs and bars, while lager drinkers are being subsided. The rise in duty means the UK spirits tax remains higher than the UK average across EU member states, highest in the G7 and the highest in Europe. This means 70% of the cost of a bottle of gin is currently claimed by HMT. Recent analysis by the Scotch Whisky Association estimates that since recent duty hikes, the Treasury is losing £350 a minute or half a million pounds a day in tax revenue.  

Successive duty hikes have added to the pressure on pubs, bars and wider hospitality; spirits make up one-third of all alcoholic drinks sales in hospitality settings and generate substantial revenues for the hospitality sector. Polling found 66% of pub owners state that spirits generate a higher profit margin per serving than beer, however your government has continued to focus support only on draft beer. Worryingly, a survey last year showed some 16% of pubs say they are unlikely to be open in 12 months’ time.

With the added pressures of high energy costs and increases in National Insurance contributions, the sector feels unappreciated and abandoned by successive governments. Other countries protect, support and promote their iconic products whilst our sector feels it’s been hit by all sides in recent years.

We want to work with the Government to ensure that this Great British success story is properly recognised as a growth opportunity for this Government that would thrive if it was treated fairly – with increases in sale both here and across the globe, delivering increased revenue for the Treasury.

We invite you to visit one of our member distilleries to see first-hand why this exciting, innovative, high-potential sector is one that we should celebrate.

Yours sincerely,

UK Spirits Alliance

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