Treasury receipts for alcohol duty have fallen by over £180m, despite the government continuing to increase rates for beer, wine and spirits suppliers.
Total alcohol duty receipts declined by £182m, or 1.4%, to £12.4bn in the financial year ended 6 April 2026, newly released government figures show.
Spirits and wine duty receipts were particularly hard hit, both declining by £94m compared with the year prior. Beer duty receipts fell by £68m, as brewers reformulated products to take advantage of lower rates on weaker brews.
It comes after the government elected to increase alcohol duty by 3.66% in line with inflation in February.
That increase was the third time alcohol duty has gone up since August 2023, when a major change in how booze rates are calculated was introduced alongside a 10.1% hike.
The fall in duty receipts showed the punishing impact tax rises were having on consumer demand for alcohol, Wine & Spirit Trade Association boss Miles Beale said.
“With every new set of data we see clearly that increasing duty rates year-on-year reduce consumer demand and income to the Exchequer,” he said. “Combined wine and spirit duties were £188m lower in 2025/26 than in 2024/25.”
The government’s recently announced review into 2023 duty changes presented “a clear opportunity for a major rethink,” ahead of the 2026 autumn budget, Beale added.
Failing to address ever-rising alcohol duty rates risked “taxing the spirits sector into oblivion,” claimed MP Carolyn Harris, chair of the APPG for spirits.
“The figures today are crystal clear,” Harris said. “Successive excise duty increases have damaged our world-leading spirits sector and led to the Treasury losing money. This is exactly the opposite of what was intended and it is time to change course.
“We need to take a different approach to excise duty so that the industry – and the pubs and bars that depend on it – can create jobs and opportunities in regions across the country. This is what will deliver benefit for the Exchequer.”
HM Treasury was approached for comment.
No comments yet