Alcohol Duty Hike Increases Pint Price by 2p in New Budget

Chancellor John Healey has announced a 2p increase to the price of a pint of beer as part of a rise in alcohol duty, a move that has been criticized by pub landlords and industry groups. The increase, which takes effect on February 1, will see the duty charged per pint rise in line with the Retail Price Index inflation, currently at 3.9 percent.

This adjustment means the tax paid per pint will increase from 50p to 52p. For an average bottle of wine, the alcohol duty is expected to rise by between 10p and 12p, while a 37.5 percent spirit will see a 35p increase. The tax applies to alcohol with an alcohol content above 1.2 percent.

The decision comes despite appeals from the hospitality sector to freeze or reduce alcohol duty, particularly in light of existing economic pressures. Andy Lennox, who runs The Old Thatch pub and campaigns for publicans, described a potential duty increase as a "kick in the teeth" for the industry. He expressed concern that pubs would either absorb the costs, which he stated they cannot afford, or pass them onto consumers who are already facing financial strain. Lennox called for a reduction in VAT on hospitality food and drink, similar to practices in Europe, rather than what he termed "taxing the businesses that deliver them into closure."

This latest duty hike follows a 3.66 percent increase in February, which added 6p to the price of an average pack of lager, 13p to a bottle of wine, and 11p to prosecco. The government's Budget documents detail the increase, although it was not explicitly mentioned by Healey in the House of Commons.

In a related measure, Healey announced £10 million in alcohol duty tax relief for over 2,000 small brewers of beer and cider. However, trade bodies argue that this does not offset the broader impact of the duty increase.

Miles Beale, chief executive of the Wine and Spirit Trade Association, had urged the Chancellor to freeze alcohol duty, citing rising fuel prices and inflation as significant pressures on the industry. He stated that increasing alcohol duty contradicts the government's stated aims of supporting businesses and growth, arguing that such tax hikes have consistently failed to generate the projected revenue.

Emma McClarkin, CEO of the British Beer and Pub Association, highlighted the high rates of beer duty paid by UK brewers compared to European counterparts, noting they pay 12 times more than brewers in Germany and Spain. She suggested that freezing the tax would help bring UK brewers closer to parity with their European neighbors and support job creation in the sector.

Carolyn Harris, Labour MP and chair of the All-Party Parliamentary Group for UK Spirits, has previously called for fair treatment of all alcoholic beverages, suggesting that discriminatory taxes hinder efforts to save pubs.

For the 2025-26 financial year, alcohol duty generated approximately £12.44 billion, a slight decrease from its peak of £13.2 billion in the 2021-22 financial year.