The price of wine and spirits is to rise, but pints in pubs will cost a penny less under changes to duty on alcoholic drinks, the Chancellor has announced.
Rachel Reeves announced that alcohol duty rates on non-draught products will increase in line with RPI from February next year.
However, duty on draught products – or pints pulled in pubs – will be cut by 1.7%, meaning “a penny off a pint in the pub”, she said.
The latest hikes to duty on wine and spirits follow increases in August last year that were the largest in almost 50 years, adding 20% to excise duty on more than 85% of all wines on the UK market and more than 10% to duty paid on full strength spirits.
Alcohol duty is paid by manufacturers when they make their products.
In general, spirits and wines are taxed more heavily than ciders and beer due to their stronger alcohol content.
The duty is generally passed onto consumers by manufacturers, but product price increases are at their discretion.
The UK Spirits Alliance (UKSA), which represents more than 280 distilleries and micro-businesses across the UK, described the duty increase as a “kick in the teeth”.
UKSA spokesman Stephen Russell said: “Pubs are more than pints – a third of all alcoholic drinks sold across hospitality are spirits. Today’s decision won’t stop thousands more pubs and distillers closing down.
“The last government hiked spirits duty by 10.1% and lost over £300m and counting in Treasury revenues. This decision will increase those losses in future and will cost jobs, reduce investment and damage growth.
“Lessons have not been learnt and commitments to the sector during and since the election have been broken. We strongly urge MPs across Britain to make their voices heard and condemn this duty hike.”
However Institute of Alcohol Studies chief executive Katherine Severi said the changes specifically targeted cheap, supermarket alcohol, which would narrow the widening gap in affordability between pub and supermarket alcohol.
She said: “With nearly 80% of alcohol now consumed off-trade, we are no longer a nation of pub drinkers. This has contributed to the devastating rise in chronic harms from alcohol, including deaths from alcohol-related liver and heart disease.
“There are both public health and economic reasons to move people back to drinking in pubs and not at home. In many areas, pubs are central to community life, promoting social cohesion in ways that solitary, home drinking cannot.”
Meanwhile, smokers and vapers will pay more with the announcement a new vaping tax and an increase in tobacco duty.
Ms Reeves confirmed that the Government will introduce a “flat rate duty” on all vaping liquid from October 2026, while also renewing the tobacco duty escalator for the remainder of this Parliament at RPI plus 2%.
Ms Reeves increased duty on hand rolling tobacco by 10% this year and, in addition, she introduced a one-off increase in tobacco duty “to maintain the incentive to give up smoking”.
The amount of tax paid on cigarettes usually increases in line with inflation each year.
