UK Alcohol Prices Rise as New Tax System Takes Effect

As of February 1, 2025, the UK will implement a new alcohol duty system that increases tax rates on wine and spirits, coinciding with a 3.6% rise in alcohol tax due to inflation. The number of tax bands for wine will expand significantly, leading to price hikes for consumers; for example, the duty on a bottle of gin will increase by 32p, and a bottle of strong red wine (14.5% ABV) will see a rise of 54p. The Wine and Spirit Trade Association (WSTA) warns that these changes, following earlier tax hikes in August 2023, could lead to a cumulative increase of 98p for wine over 18 months, while also complicating retail operations. Critics argue that the new rules will reduce product variety and increase prices, impacting both consumers and businesses negatively. Additionally, upcoming waste packaging recycling fees may further exacerbate costs for both wines and spirits. The government claims that these reforms aim to create a simpler and fairer tax system, although the practical implications for consumers remain a concern.