London, November 23, 2025
UK gin and spirits producers are raising urgent concerns over the potential for another increase in alcohol duty in the upcoming November Budget, warning it could further inflate prices and jeopardise the survival of many businesses amid a challenging economic environment.
Recent tax hikes have already increased costs significantly. In February 2025, the UK government raised alcohol duty by 3.6%, and additional increases are anticipated in the forthcoming Budget this November. The Wine and Spirit Trade Association (WSTA) highlights that these cumulative tax changes have added up to 47p per bottle of gin and over £1 on wine and spirits within the past year.
The effects on the industry are substantial. Continuous tax rises are escalating consumer prices and eroding producers’ profit margins. Small and medium-sized enterprises (SMEs) in the gin and wine sectors are particularly vulnerable, struggling to cope with rising operational expenses, which include national insurance contributions, minimum wage increases, and elevated business rates.
Economic headwinds exacerbate the situation. With the UK economy forecasted to grow at a modest 0.9% in 2025, the environment is unfavourable for further cost impositions on businesses and consumers alike. Industry representatives argue that additional alcohol duty hikes could accelerate business failures and reduce market competitiveness.
Trade bodies and policymakers are calling for restraint. There is a united appeal urging Chancellor Rachel Reeves to implement a freeze on alcohol excise duty in the November Budget to mitigate further economic damage. The Treasury, however, has reportedly seen a daily loss of £500,000 in alcohol tax revenue since the last substantial increase, as consumers switch to cheaper or alternative products in response to higher prices.
The wider impact extends beyond businesses to consumers and public revenue. Increased excise duties tend to suppress alcohol consumption and alter buying habits, which may negatively affect sales in pubs and restaurants. The policy debate highlights the challenge governments face in balancing the need for revenue generation with the economic sustainability of small businesses and maintaining consumer affordability.
Growing apprehension remains within the UK spirits sector, with industry leaders and stakeholders watching closely for government decisions. The potential for further tax increases underscores ongoing tensions between fiscal policies aimed at funding public expenditures and the imperative to support a vital segment of the UK’s beverage industry.