At today’s Budget, the Chancellor announced that alcohol duty rates will be increased, to keep them in line with inflation.
All duty rates will go up by 3.66%, the rate of RPI inflation, from 01 February 2026.
Our Chief Executive, Dr Katherine Severi, welcomed the decision:
We welcome the government’s decision to keep alcohol duty in line with inflation. It sends a clear signal that ministers aren’t bowing to the barrage of misinformation and aggressive lobbying from the alcohol industry. Past cuts to alcohol duty have handed out more than £28 billion in tax breaks to multinational producers, even as alcohol deaths, hospital admissions, and inequality have soared.
This government has chosen the right course today – but to significantly reduce record alcohol deaths and the huge impact it has on our most deprived communities, it really needs a more comprehensive plan. Minimum unit pricing, complemented by a duty escalator, would be the most effective way to bring deaths down. Since drinking at home is both a huge driver of chronic diseases and damaging to pubs, specifically targeting cheap, supermarket alcohol would be good for public health and pubs.
Tackling alcohol harm is also vital for economic growth, as England alone loses well over £5 billion a year in lost productivity due to alcohol. We desperately need a national alcohol strategy that combines these fiscal measures with other evidence-based policies if we want to see a thriving and healthy population.
The government states that there will be no financial impact on the Treasury, as keeping duty rates in line with inflation is the default assumption.
The official forecast by the Office for Budget Responsibility explained that:
Alcohol duty receipts are expected to raise £12 billion in 2025-26, a 5.1 per cent decline relative to 2024-25. Receipts are then anticipated to increase to £14 billion by 2030-31, an average rise of 3.4 per cent each year, largely driven by increases to the duty rate that more than offset the impact of lower in-year and forecast consumption.
The quantity of alcohol products sold is forecast to sharply decline by 6.4 per cent this year and remain broadly flat from 2027-28. This is likely driven by a combination of factors such as a growing trend of alcohol moderation, with substitution to no- and low-alcohol alternatives, and a response to higher prices.
Various alcohol industry trade groups criticised the decision, with the CEO of the Wine & Spirit Trade Association saying it was a “typically disappointing and shortsighted decision” that would only prolong a “doom loop” in the economy.