𝓤𝓷𝓲𝓽𝓮𝓭 𝓝𝓮𝔀𝓼

The Treasury’s tax raid on distillers has left both the country and Britain’s whisky and spirits sector worse off, Chancellor Rachel Reeves has been warned. The industry has sent out an SOS, warning that a “catastrophic” 17% hike in spirits duty over the last three years has led to a £94million fall in tax revenues in 2025-26. Labour MP Carolyn Harris, who chairs the all-party parliamentary group for UK Spirits, warned Britain risks “taxing the spirits sector into oblivion”. She said the duty increases have “led to the Treasury losing money”, which is “exactly the opposite of what was intended, and it is time to change course”.

Distillers and MPs from across Britain are pleading for change to prevent further harm to the sector, stating that revenues are £ 1.1 billion lower than expected when a new alcohol duty system was introduced in 2023. Braden Saunders, the founder of the Doghouse Distillery in Battersea, London, warned that the UK capital has “one of the most exciting spirits scenes in the world” but “that success story is slowly being written off”.

He said the fall in revenues should be a “moment of reckoning”, adding: “The Government has the opportunity to look at the evidence clearly and acknowledge that the current approach simply isn’t working for anyone.”

Trade bodies including the UK Spirits Alliance, the Scotch Whisky Association, the English Whisky Guild and the Gin Guild have issued a joint warning, saying it is “critical” the Treasury does not ”turn a blind eye” to the impact of a “punitive and distortive duty rate” which has resulted in “job losses and investment pauses”.

They state: “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.”

Conservative MP Joe Robertson said: “I’ve met with proud business owners who have told me that, under the current duty system, their success is being totally undermined. Revenues falling should be a wake-up call to all.”

Wendy Chamberlain, a Liberal Democrat MP who chairs the all-party parliamentary group for Scotch Whisky, said: “This year’s promised review of the alcohol duty system is an opportunity to address the root of that Treasury shortfall, to ensure that spirits are not discriminated against compared to other categories of alcohol, and to support Scotch Whisky producers in their home market.”

Shadow Chancellor Sir Mel Stride said: “Rachel Reeves’ tax rises are crippling our economy, damaging growth and leaving everyone worse off. You can’t tax your way to growth.”

A Treasury spokesperson said: “We have kept alcohol duty rates steady in real terms to support public health and the public finances. The Office for Budget Responsibility’s latest forecast expects alcohol duty receipts to increase.”

The Treasury argues there are several possible reasons for falling alcohol consumption, including “increased moderation among consumers”.