From 1 February 2026, alcohol duty in the UK was increased in line with Retail Prices Index (RPI) inflation, about 3.66 %, as confirmed in last year’s Autumn Budget. While the tax is paid by producers and wholesalers, industry leaders warn this rise is likely to be passed on to consumers through higher shelf and bar prices.
How Much Prices Are Likely to Move
According to the latest figures, a bottle of gin may see ~38p extra tax added. A bottle of Scotch whisky may see ~39p extra duty. A 14.5 % red wine may pay ~14p more in duty. The cost of a pint in pubs could see an effective increase of around 2p per pint just from duty.
These figures are duty costs, not full retail price rises, but hospitality operators are already warning that duty hikes will continue to feed through into what customers pay.
Why This Matters for Your Business
Hospitality operators have been dealing with rising costs across the board, from wages and energy to supplier prices and business rates. And duty increases come on top of all of that. Industry bodies like the British Beer & Pub Association and Wine & Spirit Trade Association have warned that these cost pressures are forcing producers and pubs to raise prices just to maintain margins.
This means menu prices will likely rise, especially for wine & spirits where duty makes up a larger share of product cost. Customer value perception could change, especially if drinks creep above certain psychological price points. There’s a real risk that overall drink sales decline if footfall slows because customers perceive the pub or bar as “too expensive.”
What You Can Do
Here are practical strategies to manage this transition:
1. Review your pricing strategy
Consider value bundle offers (e.g., wine with food pairings at a value price).
2. Communicate with your customers
Be transparent about price changes: customers often appreciate honesty about rising supplier and duty costs affecting hospitality.
3. Boost draught & local options
Draught beer still benefits from lower duty relief compared to packaged products, helping protect margins.
Local craft beers and ciders can differentiate your offering while supporting local suppliers.
4. Engage with industry bodies
Join trade organisations like UKHospitality, WSTA, or BBPA to stay on top of policy developments, lobbying efforts and support initiatives.
5. Train your team
Educate staff on upselling techniques and confident drinks recommendations to maintain per-head spend.
Alcohol duty rises are not just another tax increase. They affect what you buy, what you sell, and how your customers react. With duty now indexed to inflation, this could be a recurring dynamic rather than a one-off.
Being proactive, through smart pricing, clear communication, and sales strategies that reflect your customers’ value expectations can help protect your margins and customer loyalty in a challenging environment.
