The issue centres on how alcohol duty changes announced across successive Budgets interact and how they are being communicated.
At the Autumn Budget 2024, the government announced a 1.7% reduction in alcohol duty rates for qualifying draught products sold in pubs. That change came into effect on 1 February 2025 and equated to around 1p off the duty paid on an average strength pint.
Ministers continue to reference this as evidence of ongoing support for pubs.
This increase, currently estimated at 3.66%, will take effect from 1 February 2026.
Widespread confusion
As a result, while draught beer will still benefit from lower duty than it would have paid without draught relief, duty per pint will rise in cash terms year on year once the inflation uprating takes effect.
This is why brewers and wholesalers are modelling increases of around 1 to 2p per pint for a typical 4% beer.
In short, pubs are better off than they would have been without draught relief, but they are not seeing an outright cut compared with the previous year.
Both positions are technically correct, but the difference between the policy baseline and real-world pricing has led to widespread confusion.
HM Treasury has confirmed to The Morning Advertiser (The MA) that the 1p per pint figure relates to the earlier February 2025 change and that no new duty cut was introduced at the Autumn Budget 2025.
Clearer communication needed
The latest Budget instead locked in an inflation linked increase for 2026, consistent with the Office for Budget Responsibility’s assumption that alcohol duty rises annually in line with inflation.
For operators, the practical takeaway is that alcohol duty on draught beer is set to increase from February 2026, even though it remains lower than the counterfactual scenario without draught relief.
Industry figures have warned that clearer communication is needed, with many operators struggling to reconcile government messaging with supplier pricing and forward cost projections.
