The latest inflation-linked tax hike, set at 3.66%, will mean duty on a bottle of 14.5% ABV wine will have jumped by £1.10 since the new duty regime was introduced in August 2023.
Since the introduction of the UK’s new taxation system, duty on beer and spirits has risen by over 18%, according to the Wine & Spirit Trade Association (WSTA) said.
For higher strength wines the increase has been even greater and duty has risen by over 49%, the association added, with the UK now topping the tax table with the highest duty rate in Europe for still wine at 14.5% ABV.
Doom loop
The Wine and Spirit Trade Association argued that the Government’s “short-sighted decision” to keep piling on taxes has only perpetuated the economy’s “doom loop”.
It claimed history has shown increases to duty lead to higher prices for consumers and reduction in sales, which in turn drains Treasury funds while fuelling inflation.
| Duty now | Price now £ | Duty 3.66% | Price with duty increase | Price change (duty plus VAT) | VAT | Total tax | |
|---|---|---|---|---|---|---|---|
| Red Wine 14.5% abv | £3.21 | £9.50 | £3.33 | £9.64 | £0.14 | £1.61 | 51% |
| White Wine 12.5% abv | £2.77 | £8.75 | £2.87 | £8.87 | £0.12 | £1.48 | 49% |
| Gin, 37.5% abv, 70cl | £8.60 | £19.00 | £8.92 | £19.38 | £0.38 | £3.23 | 63% |
| Scotch Whisky, 40% abv, 70cl | £9.18 | £18.00 | £9.51 | £18.39 | £0.39 | ||
| Vodka & diet cola RTD, 5% abv, 25cl | £0.32 | £2.15 | £0.33 | £2.16 | £0.01 | ||
| Prosecco, 11% abv, 75cl | £2.43 | £12.50 | £2.52 | £12.61 | £0.11 | ||
| Lager, 4.6% abv, 4x330 ml | £1.32 | £6.00 | £1.37 | £6.06 | £0.06 | ||
| Cider, 4.5% abv, 4x330ml | £0.59 | £5.25 | £0.61 | £5.27 | £0.02 |
For the financial year to date total alcohol duty receipts are down 1.4%, spirits are down by the most at a massive 2.4%, beer is down 1.4%, and wine down 2%, WSTA explained.
The association further warned if alcohol receipts remain 1.4% lower for the last quarter of this financial year, total receipts are estimated to come in at around £12.4bn, which will be £180m lower in 2025/26 than in 2024/25.
Tax raids
WSTA chief executive Miles Beale 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 - NI 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.
“The WSTA continues to call for Government to recognise the immense pressure consumers, retailers and hospitality are under and put a stop to the tax raids.”
