Drinkers across the UK are set to face higher prices for wine and spirits as a significant increase in alcohol duty comes into effect this Sunday, 1 February.

Industry leaders warn that businesses “have no choice but to increase prices” to remain viable amid mounting financial pressures.

The tax levied on alcoholic beverages will rise by 3.66 per cent, in line with the Retail Prices Index (RPI) inflation, a measure confirmed in November’s autumn budget.

While the duty is directly imposed on producers, industry chiefs anticipate a “trickle down” effect, with consumers ultimately bearing the brunt of these additional costs.

Official figures illustrate the impact: the duty on a typical 37.5 per cent alcohol by volume (ABV) bottle of gin will climb by 38p to £8.98, inclusive of VAT.

Similarly, a 40 per cent ABV bottle of Scotch whisky will see its duty increase by 39p, reaching £9.51. A 14.5 per cent red wine will incur an additional 14p in duty.

The Wine and Spirit Trade Association (WSTA) highlighted that the duty on a 14.5 per cent red wine has now surged by £1.10 per bottle since the new alcohol duty regime was introduced in August 2023.

In response, the UK Spirits Alliance, representing hundreds of distillers, has urged the Chancellor to use an upcoming duty review to foster growth, address “spirits discrimination,” and establish a long-term strategy for the sector.

The duty structure, partly linked to drink strength, saw an overhaul in 2023, resulting in beer below 3.5 per cent ABV paying significantly less tax.

This has prompted some beer brands, such as Foster’s, to reduce their strength to 3.4 per cent in recent months to mitigate duty costs.

However, the latest increase will affect beer sold in both pubs and supermarkets, marking the first time pubs have been impacted since 2017.

Emma McClarkin, chief executive of the British Beer and Pub Association, stated: “These changes unfortunately increase the likelihood of further price rises, which no brewer or publican would want to inflict on their customers.

“For brewers, who already pay some of the highest rates of beer duty in Europe, this increase will add further strain to their already razor-thin profit margins and risk one of the UK’s world-renowned industries producing the greatest beers in the world.”

Miles Beale, chief executive of the WSTA, criticised the government’s approach: “Despite the OBR (Office for Budget Responsibility) at last acknowledging higher prices lead to a decline in receipts, the Government fails to recognise that its own policy is benefiting no-one.

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“For the nation’s wine and spirit sector the complexities of price changes, especially for wine which is now taxed by strength, mean more red tape headaches ahead.

“Add to this all the other costs – including NI (national insurance) contributions, business rates and waste packaging taxes – and businesses have no choice but to increase prices in order to keep afloat, which unfortunately means consumers are going to take the hit once again.”

Braden Saunders, spokesperson for the UK Spirits Alliance and co-founder of Doghouse Distillery, Battersea, remarked on the timing: “The timing couldn’t be more ironic. Just as dry January draws to a close and people contemplate their first hard-earned drink, they’re met with higher prices at the bar.

“The spirits industry has been treated as a cash cow by consecutive governments, and the sector is on its knees.”

Allen Simpson, chief executive of UKHospitality, echoed these concerns: “Hospitality businesses are facing price pressures at every turn and our sector’s cost burden is growing at an unsustainable rate.

“Increases to alcohol duty, while not paid directly by operators, is another pressure, if it is passed on to businesses through higher drinks prices. We strongly urge suppliers to show restraint in doing so, recognising the economic pressure the sector is under.”

A Treasury spokesman defended the policy, stating: “For too long the economy hasn’t worked for working people, and cost-of-living pressures still bear down. That’s why we are determined to help bring costs down for everyone.

“It’s why we’re taking £150 off energy bills, increasing the National Living Wage, ending the two-child limit, rolling out free breakfast clubs for all primary school children, and freezing fuel duty, rail fares and prescription fees.

“We need to rebuild the public services we all rely on. We’ve put record funding into our schools and NHS to give every child the best start in life and bring down waiting lists.

“Alcohol duty plays an important role in ensuring public finances remain fair and strong and funds the public services people rely on every day.”

Last Updated:January 31, 2026, 19:42 IST

Union Budget 2026, to be tabled by Nirmala Sitharaman, will focus on a detailed Part B, outlining India’s economic vision, reforms, and global strengths.

Finance Minister Nirmala Sitharaman to present the Union Budget in Parliament tomorrow, Feb 01.

Budget 2026: Union Budget 2026 to be tabled tomorrow, Sunday, February 01, 2026, is expected to be different and unique from earlier budgets delivered since Independence. It is expected that the Finance Minister Nirmala Sitharaman will focus more in detail on Part B than Part A, as seen in earlier budgets, government sources said.

Traditional Budget Structure Likely To Change

In past budget presentations, Part A of the Finance Minister’s speech typically carried extensive detail on economic conditions, fiscal numbers, and major policy announcements, while Part B was relatively brief and limited in scope. However, government sources said this long-standing format is set to change in the upcoming budget.

According to sources, Finance Minister Nirmala Sitharaman is expected to devote significantly more time and detail to Part B of the Budget Speech than seen in previous years. GoI sources said this shift reflects the government’s intention to present a more structured and forward-looking policy narrative.

Focus On Short-Term And Long-Term Economic Goals

The sources said Part B of the Budget Speech will place strong emphasis on both immediate economic priorities and long-term development goals. The section is expected to outline how the government plans to balance near-term growth, fiscal discipline, and social welfare with longer-term structural reforms.

Part B will articulate India’s economic vision as the country moves deeper into the second quarter of the 21st century, highlighting policy continuity as well as new initiatives aligned with evolving global and domestic challenges.

Showcasing India’s Strengths On The Global Stage

The sources further said Part B of the Budget Speech will offer a roadmap for showcasing India’s local strengths in a global context. This is expected to include an assessment of India’s current economic capabilities, sectoral advantages, and future growth potential.

The emphasis will be on positioning India as a competitive and resilient economy, while reinforcing its role in global supply chains and international markets.

Economists And Global Experts Watching Closely

Given the expanded scope and strategic intent of Part B, GoI sources said it is likely to draw close attention from economists, policy analysts, and global experts. The section is expected to serve as a key indicator of the government’s medium- to long-term economic priorities and reform trajectory.

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Gold prices dropped significantly both locally and internationally on Saturday, providing temporary relief to buyers but causing substantial losses for investors.

Market sources reported that the price of gold in Pakistan dropped suddenly by Rs25,500 per tola today, bringing the new rate to Rs511,862 per tola.

Similarly, the price of 10 grams of gold fell by Rs21,862, reaching Rs438,839.

Jewellers said the decline reflects trends in the global market. Internationally, gold fell by $255 per ounce, bringing the price to $4,895 per ounce.

Market analysts noted that global economic conditions, the value of the US dollar, and investor sentiment influence gold prices, a trend now evident in local markets.

Silver prices also declined, with the price of one tola dropping by Rs2,063 to reach Rs9,006.

Market insiders said the fall in gold and silver prices may stimulate some buying and selling activity, but the overall trend will depend on global market conditions in the coming days.