WSTA asks government to end ‘doom loop’ as duty to rise
The WSTA has called on the government to end the “doom loop” caused by its decision to continue to increase alcohol duty at the last Budget (as Harpers reported).
Wine and spirit prices are set to rise on 1 February after the alcohol duty increase – in-line with RPI at 3.66% – comes into effect.
This latest tax increase will mean duty on a bottle of wine at 14.5% abv will have increased £1.10 (or 49%) since the beginning of the duty regime on 1 August 2023.
The UK now has the highest duty rate in Europe for such wines.
The situation is similar for spirits – nearly two thirds of the price of an average priced bottle of gin at 37.5% abv is tax, and duty since August 2023 will have increased by £1.38.
Since the introduction of the new taxation system, duty on spirits and beer has risen over 18%.
The WSTA said that increases to duty lead to higher prices for consumers and a consequent reduction in sales, draining Treasury funds while adding fuel to inflation.
From April-December 2025 total alcohol duty receipts were down 1.4%, with spirits down the most at 2.4%, beer down 1.4% and wine down 2%.
If alcohol receipts remain 1.4% lower for the last quarter of the financial year, they are expected to come in £180m lower in 2025/26 than in 2024/25, at £12.4bn.
Miles Beale, chief executive of the WSTA, said:
“Despite the OBR at last acknowledging higher prices lead to a decline in receipts, the Government fails to recognise that its own policy is benefiting no-one.
“For the nation's wine and spirit sector the complexities of price changes, especially for wine, which is now taxed by strength, mean more red-tape headaches ahead.
“Add to this all the other costs including national insurance contributions, business rates and waste packaging taxes – businesses have no choice but to increase prices in order to keep afloat, which unfortunately means consumers are going to take the hit once again.”
Picture Credit: Mohamed_Hassan on Pixabay
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