UK to hike alcohol duty with inflation

The UK government will increase alcohol duty in line with the Retail Prices Index (RPI) from February 1, 2026, Chancellor Rachel Reeves confirmed in the 2025 Autumn Budget. The Treasury said the uprating is intended to “maintain its current real-terms value” while balancing the sector’s economic contribution with public-health objectives.

The move was met with swift condemnation from drinks and hospitality trade bodies, which warned the increase will further squeeze margins and push up retail prices.

Government documents note that small producer reliefs will be uprated alongside duty rates to preserve relative discounts for artisanal makers, but industry groups say that will not offset wider pressures on margins, consumer demand and export competitiveness. Commentary from trade media and industry bodies suggests the debate over duty policy will continue as the rise comes into effect in February.