UK alcohol duty changes drive market shifts

A major change in wine duty occurred in the UK on 1 February 2025, with wines between 11.5% and 14.5% abv, which until then had a flat duty rate, now subject to a duty rate that changes with alcohol level.

The proposed changes in duty started on the 1 August 2023 when a sliding scale of duty was introduced by Rishi Sunak as part of a Brexit bonus, (duty that changes on alcohol level was not allowed as part of being in the EU). But wines between 11.5% and 14.5% were held at a fixed rate until the 1 February 2025.

The latest IWSR (International Wine & Spirit Research) data shows that the new alcohol duty system, introduced in 2023, continued to impact the market in 2024, with higher rates for stronger drinks. Beer sales surged, benefiting from favourable duty rates on lower-ABV products, while spirits saw smaller gains. The changes also provided a one-off boost to low and no alcohol sales, though this remains a niche segment.
Alcohol-free beer grew 20% in 2024, but overall growth in the no and low drinks market is expected to stabilise. As producers adjust to the new tax structure, consumers are seeing more lower-ABV options on shelves, highlighting how duty policies are reshaping the UK drinks industry.