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Price of a pint could rise from February as Reeves considers Alcohol Duty hike
A 4.5% alcohol duty rise could increase government borrowing costs by £90m per 1% hike and raise prices amid 3.8% inflation, industry warns of impact on public finances.
- Ahead of the Autumn Budget this year, Chancellor Rachel Reeves could hike alcohol duty by as much as 4.5%, using excise duty as one of few levers to shift inflation.
- Alcoholic beverages accounted for 3% of Consumer Price Index inflation in the year to August 2025, and last year’s 3.6% duty hike formed part of two years of rises that the Scotch Whisky Association says left receipts £600m short of Office for Budget Responsibility forecasts.
- Under a 4.5% uplift, a 70cl gin at 37.5% would increase by 47p, and a four‑pack of 330ml lager at 4.6% by 7p, as concrete examples of price effects.
- The fiscal math pits higher borrowing costs per 1% against potential savings from a freeze, as every 1% excise duty increase would raise government borrowing costs by £90m next year, while the Scotch Whisky Association says a freeze could save over £300m.
- The Scotch and spirits industry says the cumulative two‑year rise has left most of a bottle’s price as tax, as HMT figures show spirits duty revenue was down 17% in September.
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