The reform of the alcohol excise duty regime, started under the previous government and completed under Keir Starmer’s Labour administration, was long overdue. Some changes, such as levying excise duty on wine according to strength, were only possible in the wake of the UK leaving the EU. Others reflected a well-founded intent to simplify a regime that had been tinkered with, rather than evolved, over the previous 50 years.
How does it feel three years on? As far as wine and spirit businesses are concerned, the overall impact has been unremittingly negative. Despite most wine and spirits duties increasing by a minimum of 18% since August 2023, receipts in 2025/6 were lower than in 2022/23. Increasing duty pushes up prices, stifles demand and reduces income to the Exchequer.
So I welcome the government’s commitment to evaluating the impact of the new duty regime. The Treasury set itself three original aims for these reforms: a simpler system; a more economically rational one, with fewer distortions and arbitrary distinctions; and a lighter administrative burden. By my reckoning, the reforms have failed on every count. My biggest fear is that the government will get away with changing the exam question, reviewing the outcomes it would prefer to discuss, not the aims it actually set, before marking its own homework.
My hope is the opposite: that the government undertakes a meaningful evaluation, looks at all available evidence with an open mind, listens to the concerns of business and makes changes. Because the evidence here is glaringly clear.
The reforms have not made the excise duty system more economically rational. Levying excise duty on the strength of a product as sold, without any consideration of how it may be consumed, maintains and reinforces the inequities of the previous system. Duty on wine and spirits continues to be levied at significantly higher rates than other categories of alcoholic beverage.
The reforms have not led to fewer distortions and arbitrary distinctions – in fact, quite the opposite. It makes no sense to apply widely differing rates to different categories of products within the 3.5% to 8.4% abv range. There should be one single rate for all drinks within this range. It is also distortive to restrict Small Producer Relief and Draught Relief to products under 8.5% abv – this penalises wine and spirit producers who are bound by strict production rules that set minimum alcoholic strengths above 8.5% abv. Both reliefs can and should be available to all.
And while the reforms have led to some simplification in administrative burden, levying duty on wine according to strength has been disproportionately costly for businesses to introduce and has significant, ongoing costs attached. Again, there is a simple solution, the easement mechanism that taxed wine at a midpoint strength, scrapped in February 2025, should be reinstated on a permanent basis.
So my message – probably to yet another set of Treasury ministers – is clear: mark the reforms against the aims you set, not the ones you would rather discuss now. Simplicity, rationality and lower burden were the promise, yet none have been delivered.
As we enter a new period of UK politics, His Majesty’s Treasury could use its evaluation to start as all government departments should go on. There is a clear and early opportunity to demonstrate that ministers want to work with business, including to reduce red tape, remove unnecessary complexity and back growth.
Miles Beale is chief executive of the Wine & Spirit Trade Association
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