Back to the bar? Duty hike hits as dry January ends
The Government’s latest excise duty hike hits consumers today, as dry January ends. The Chancellor announced a 3.66% rise in her last Budget, following previous increases of 3.65% and 10.1%. Distillers and landlords alike have warned that this is already an industry ‘on its knees’, with MPs adding to calls on Ministers to tackle the pressures it faces.
The UK Spirits Alliance, which represents hundreds of distillers across the UK, has written to Chancellor Rachel Reeves calling on her to use the upcoming duty review to focus on growth, put an end to spirits discrimination and put in place a long-term approach that gives businesses the confidence to plan and invest.
Ahead of the Budget, 91% of landlords said that they may have to raise prices in response to duty rises. One distiller told the UK Spirits APPG’s recent inquiry that between 2019 and 2022, they grew their business by 500% and created fourteen jobs. Since 2023, their business has shrunk, products cost more, and they have had to let staff go.
The UK has the highest rate of excise duty in the G7 and amongst the highest in Europe.
Carolyn Harris MP, Chair of the APPG for UK Spirits, said:
“Another duty hike on spirits will now hit people who simply want to enjoy a drink after a hard day’s work. Pub owners consistently tell me that spirits are among their most profitable products – so this tax rise compounds the difficulties they’re already facing.
“Pubs are more than pints. I’m calling on Ministers to ensure that upcoming duty review is comprehensive and considers the serious pressures bearing down on this struggling industry.
“Our spirits sector creates jobs, opportunity and employment. We must let it thrive.”
Braden Saunders, UK Spirits Alliance Spokesperson and Co-Founder of Doghouse Distillery, Battersea, said:
“The timing couldn’t be more ironic. Just as dry January draws to a close and people contemplate their first hard-earned drink, they’re met with higher prices at the bar.
“The spirits industry has been treated as a cash cow by consecutive governments, and the sector is on its knees. Spirits and cocktails are absolutely crucial to the bottom line for any venue. As someone who’s run a successful distillery and is now opening a bar, I know that a well-curated spirits offer is what keeps the lights on.
“We need Ministers to take us seriously and help us thrive; if not, they risk losing an industry that offers jobs and growth to local economies up and down the country.”
Greville Richards, Director of Saint Sithney Distiller, Cornwall, said:
“The Government says it wants to support pubs but it is simultaneously clobbering the very products that make them profitable.
“UK Spirits face some of the highest excise duties in Europe – rates that put our distillers at a serious disadvantage both at home and abroad. How does that make any sense when British spirits are one of our greatest export success stories?
“If this government genuinely wants to support hospitality, protect British jobs and keep pubs open, we need to see a proper, comprehensive review of the entire duty system. Our spirits producers fly the flag for Britain around the world, creating jobs, driving tourism, and generating export revenue. Yet they’re being penalised for that success.”