The UK spirits industry is ramping up pressure on the government after new figures revealed a £94 million fall in spirits duty revenue for 2025/26, despite a series of tax hikes in recent years.
The Scotch Whisky Association (SWA) has joined forces with seven other spirits organisations across the UK and Ireland to warn that “spiralling duty rates are causing serious damage to the spirits sector”.
In a joint statement, the coalition calls on HM Treasury to act, arguing that the current tax regime is now punishing both producers and consumers.
“It is critical that HM Treasury do not turn a blind eye to the role the punitive and distortive duty rate has had on spirits revenue, in addition to job losses and investment pauses across the spirits industry,” the group said.
They add: “Spirits duty amounts to a super tax on the industry and must be urgently addressed.”
The signatories span the breadth of the sector, including the English Whisky Guild, Drinks Ireland: Spirits, The Gin Guild, the Irish Whiskey Association, the UK Spirits Alliance, the Welsh Whisky Association and the Wine and Spirits Trade Association.
Their intervention underlines the growing concern that the UK is undermining one of its flagship export and hospitality sectors through an increasingly uncompetitive tax environment.
Revenue down despite higher duty
The coalition points to the UK Government’s own figures, which show that a 17% increase in spirits duty over the past three years has coincided with a £94m fall in spirits revenue in 2025/26.
In total, spirits duty receipts are now £1.1 billion below the forecasts made when the reformed alcohol duty system was introduced in 2023, raising questions over whether the strategy is delivering for the Treasury.
According to the statement, pubs and bars are being squeezed at both ends, with rising costs and softer consumer demand hitting profitability.
“Pubs and the wider hospitality industry cannot survive on beer alone, yet hard pressed consumers are being forced to pay over the odds to responsibly enjoy premium spirits, which underpin the profitability of many bars, pubs and restaurants,” the organisations warn.
The industry’s intervention comes as HM Treasury formally launches an evaluation of the alcohol duty reforms introduced on 1 August 2023.
These reforms shifted the system to a strength‑based structure and introduced two targeted reliefs – Draught Relief and Small Producer Relief – designed to support on‑trade venues and smaller producers while encouraging lower‑strength products.
The review will assess how far the new regime is meeting its stated aims, including increasing consumer choice (particularly in low‑strength drinks), reducing alcohol‑related harm and supporting pubs and small producers.
The UK Government is seeking quantitative evidence and written submissions from producers, trade bodies, public health organisations, academics and other stakeholders by 1 June 2026.
Sector pushes for Autumn Budget action
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While the spirits sector has welcomed the long‑promised review, it is clear it expects the process to confront the impact of high duty levels head‑on.
The joint statement concludes: “HM Treasury promised a review of the new alcohol duty system three years after its implementation. We welcome the launch of that evaluation, and our organisations are united in our call for the review to be as comprehensive as possible, and for the Autumn Budget to take steps to support the UK’s worldclass spirits industry.”
For distillers and hospitality operators, the coming months will be crucial as they seek to persuade the Treasury that a more balanced approach to duty could both restore revenues and safeguard jobs in a strategically important sector.
