The All-Party Parliamentary Group (APPG) for UK Spirits has launched an inquiry, inviting written submissions from pubs, bars, nightclubs, and their suppliers to assess the economic consequences of increased spirits duty. The call for evidence, which opened on July 23 and will run until August 22, 2025, comes as the hospitality sector grapples with significant financial pressures, exacerbated by recent tax increases.
Duty Overhaul and Its Impact
The alcohol duty system underwent a comprehensive overhaul in 2023. This was followed by a significant hike in excise duty on spirits. The Conservative government implemented a 10.1% increase initially, with a further 3.65% added in the 2024 Autumn Budget. These successive increases have raised concerns across the industry, with many businesses fearing the impact on their bottom lines and the broader night-time economy. The British Beer and Pub Association (BBPA) has already projected a grim outlook, estimating that as many as 378 pubs could be forced to close this year. This statistic underscores the gravity of the situation and the urgency with which the APPG is seeking to understand the ramifications of the duty increases.
The inquiry’s primary objective is to gather evidence on the impact of these changes on various aspects of the hospitality sector. The APPG seeks to understand how increased duty is affecting profitability, with a focus on sales and profit margins. They are also examining changes in customer behavior, including spending habits and preferences. Additionally, the group is looking at how the duty impacts menu offerings and the overall night-time economy. The scope of the inquiry is broad, aiming to provide a comprehensive picture of the challenges facing businesses.
Broadening the Scope: Producers, Jobs, and International Comparisons
The inquiry’s scope extends beyond the immediate impact on bars and pubs. It also seeks to understand the effects on producers of spirits, the jobs they support, and the competitiveness of the UK spirits industry. The APPG will consider how the duty increases are impacting investment in the sector, innovation in product development, and exports of UK-produced spirits. This broader perspective reflects an understanding that the health of the hospitality sector is intertwined with the health of the entire spirits supply chain. The group wants to examine if the duty increases are hindering growth and the ability of UK businesses to compete on a global scale.
Furthermore, the inquiry will explore the relative impact of duty on different alcoholic beverage categories. This includes comparing the tax burden on spirits with that of beer, wine, and other alcoholic drinks. The aim is to assess whether the current duty regime creates imbalances or unintended consequences within the market. The inquiry also intends to examine international duty regimes, drawing comparisons with other countries to understand best practices and potential lessons for the UK. This comparative analysis should provide valuable insights into the potential for policy adjustments.
Call to Action for Hospitality Businesses
The APPG’s call for evidence is a direct appeal to hospitality businesses to share their experiences and insights. The group recognizes that the businesses themselves are best placed to provide firsthand accounts of the challenges they are facing. Written submissions are welcomed from a wide range of stakeholders, including pub owners, bar managers, nightclub operators, and suppliers. The deadline for submissions is August 22, 2025, giving businesses ample time to prepare their contributions. Businesses are encouraged to provide detailed information on the financial and operational impacts they are experiencing. The insights provided will inform the APPG’s recommendations and contribute to a more thorough understanding of the economic challenges facing the industry. The inquiry aims to create a platform for informed discussion and policy-making aimed at supporting the long-term viability of the UK spirits sector.
