Spirits industry sounds alarm over £1.1bn duty shortfall as Treasury review opens

Spirits industry sounds alarm over £1.1bn duty shortfall as Treasury review opens

The Scotch Whisky Association (SWA) has joined seven other spirits industry organisations across the UK in signing a joint statement warning that spiralling duty rates are causing serious damage to the spirits sector.

The coalition, which also includes 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, has called on HM Treasury to take urgent action.

The signatories point to the UK government’s own data to make their case. A 17% increase in spirits duty over the past three years has contributed to a fall in spirits revenue of £94 million in 2025/26, with total revenue now running £1.1 billion below forecasts made when the new alcohol duty system was introduced in 2023.

The joint statement said: “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.

“Spirits duty amounts to a super tax on the industry and must be urgently addressed. 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 statement comes as HM Treasury launched, on 20 April 2026, a formal evaluation of the alcohol duty reforms that were introduced on 1 August 2023. The reforms moved the alcohol duty system to a strength-based structure and introduced two new targeted reliefs – Draught Relief and Small Producer Relief. The evaluation will consider how successful these reforms have been in meeting their intended objectives, which include greater consumer choice (particularly in low-strength products), reduced alcohol-related harm, and support for on-trade businesses such as pubs and small producers.

The joint statement concluded: “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.”

The UK government is seeking relevant evidence from producers, trade bodies, public health groups, academics and other stakeholders, and is asking for quantitative data and evidence in writing to alcoholevaluation@hmrc.gov.uk by 1 June 2026.

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