The United Kingdom has been a global home for beers, wines, and spirits for centuries, stretching back to 1638 when Berry Bros. & Rudd first opened its doors in London. Today, Britain stands as the world’s largest exporter of spirits and the second-largest importer (at 1.7 billion bottles of wine) by both volume and value, this accounts for 99% of all wine consumed in this country. Behind every bottle sits a network of British enterprise: £76 billion in economic activity, around 400,000 jobs and nearly £8.5 billion in duty revenue, roughly 70% of the Treasury’s total alcohol tax receipts.
Despite this contribution, the industry is under mounting strain. Alcohol duties have risen, and for a 14.5% ABV wine, that represents a staggering 44% rise in duty in just 18 months.
The economic contribution of the sector is staggering. Each year, the UK imports 1.7 billion bottles of wine, representing 99% of all wine consumed here. This culture of responsible enjoyment sustains high streets, supports independent retailers, and provides essential income for pubs and restaurants facing difficult trading conditions. In 2024, over £12 billion was paid to the Treasury in alcohol duty, with wines and spirits contributing £8.5 billion. In 2022, the wider sector generated more than £76 billion in economic activity, contributed £22 billion in Gross Value Added, and sustained over 400,000 jobs.
Yet higher duties are squeezing both producers and consumers. When over 60% of the cost of a bottle of wine is tax, the question arises: who is truly being squeezed? Consumers, publicans, or common sense in economic policy?
Margins are tightening and there is a limit to what the public will pay before choosing to stay at home. Each percentage point of duty affects shelf prices and restaurant wine lists.
For many businesses, it is the difference between survival and closure.
Sales data show the impact. In the 12 weeks to mid-June this year, wine volumes fell by 3% in shops and 7% in hospitality, while spirits dropped 5% in shops and 8% in pubs and restaurants. Hospitality has been one of the hardest hit sectors, accounting for nearly half of all job losses since the Budget. Treasury Wine Estates, producer of brands such as 19 Crimes and Penfolds, warns that higher costs will mean tougher choices for pubs, higher prices for consumers, and less money circulating in the local economy.
Duty reform in 2023 moved the UK to a strength-based system, taxing wine by alcohol content in 0.1% increments. Alongside this, the headline rate increased 3.65% in February 2025. For a 14.5% ABV wine, this represents a 44% increase in just 18 months. Complex, internationally uncompetitive, and revenue-negative, this system is not sustainable. The United Kingdom now has the third highest wine duty in the world at £2.44 per bottle. By comparison, France charges £0.02 per bottle, Romania £0.01, and Spain nothing at all. Half of the European Union’s member states charge no wine duty.
The current approach punishes ambition, throttles innovation, and penalises productivity. Small Producer Relief excludes almost all winemakers and distillers because it only applies to drinks under 8.5% ABV. This fails to support English wineries such as Chapel Down, Nyetimber, and Camel Valley. It is illogical to punish small producers for doing exactly what the Government says it wants: innovating, employing, and exporting.
The consequences for revenue are already clear. Between April and September 2025, alcohol duty receipts were £300 million lower than the same period in 2024. If this continues, the Treasury could collect around £1 billion less than forecast. The UK is now taxing its way to lower revenues. This is not sound economic policy.
This Government should ask whether the current system supports the very businesses that contribute to the economy and communities. The United Kingdom’s wine and spirits sector is a quiet economic strength. It deserves an environment that allows it to thrive, invest, and continue supporting jobs, towns, and Treasury revenue.
A thriving economy fills the Exchequer, while a suffocated one drains it.
It is time for a fair, proportionate, and effective tax system that protects small producers, sustains hospitality, and keeps Britain competitive on the global stage.
Britain is becoming the most taxed place to raise a glass and the hardest place to sell one
