The Scotch Whisky Association (SWA) is calling on the UK Government to commit to a multi-year freeze on spirits duty, warning that recent increases have already added pressure to inflation and could drive up government borrowing costs by hundreds of millions.
According to SWA research, alcohol prices accounted for £3 in every £100 of inflation increases in the year to August 2025, based on figures from the Office for National Statistics. The trade body says this is placing further strain on consumers in the lead-up to the festive season, while undermining efforts to stabilise the economy.
The association, which represents the UK’s largest food and drink export, points out that around three quarters of the shelf price of an average bottle of Scotch is now paid in tax. The sector has faced a 14% rise in alcohol duty over the past two years, with additional increases under consideration in the forthcoming Autumn Budget.
The Scotch and spirits industry, along with its wider supply chain, is making a united call for urgent action from Chancellor Rachel Reeves, warning that continued rises in alcohol duty risk damaging business stability and long-term growth. A freeze, they argue, would support the industry while boosting confidence across hospitality, logistics, manufacturing and tourism.
Further analysis shows that for every 1% rise in alcohol duty, government borrowing costs would increase by £90 million next year. The SWA estimates that a freeze in the Autumn Budget could prevent over £300 million in additional Treasury costs, while better positioning the sector to support wider economic recovery.
Mark Kent, Chief Executive of the Scotch Whisky Association, said, “The numbers are compelling: increasing alcohol duty drives up prices for consumers, it drives down business confidence, and dries up public finances. The Chancellor herself has said she’s not satisfied with the recent inflation levels, and this research shows just how much the soaring spirits tax contributes to those figures.”
He added, “The wide-ranging support we’ve seen across a variety of sectors for action on spirits duty is testament to the damage that multiple duty hikes do to businesses’ growth prospects and stability. A freeze on excise duty in the Autumn Budget will not only give businesses confidence in their domestic market, but will take pressure off of consumers in the run-up to the festive season, and cut Treasury borrowing costs in 2026 and beyond.”
The SWA also points to government receipts which show that two years of duty rises have left Treasury revenues £600 million short of Office for Budget Responsibility forecasts. Latest figures from HM Treasury reveal that spirits duty revenue was down 17% in September compared to the same time last year.
Excise duty remains one of the few areas where the UK Government can directly influence inflation, which continues to sit at 3.8%. With pressure mounting to deliver growth and ease consumer costs, the call for action is being echoed across the drinks and hospitality sectors as they prepare for their busiest trading period of the year.