Have spirits price hikes hit your bar or pub?

If you’re tired of getting complaints about your drink prices, you’re not alone. Bars, pubs, and clubs across the UK have been grappling with rising spirits costs since the major overhaul of the alcohol duty system in 2023, and it’s pushing prices higher than ever.

MPs are now calling for evidence from hospitality businesses about the impact of inflated costs on sales, profit margins, and menus for those in the night-time economy. 

If you operate a hospitality venue and would like your experiences to be heard in Parliament, we’ll explain what you need to know about the inquiry and how you can respond.

Why is a vodka coke so expensive?

Sitting at your average pub in the UK, you may hear disgruntled punters blame Brexit, the cost-of-living crisis, or greedy landlords for the inflated drinks prices. While these reasons may be valid, there’s a lesser-known cause that has a huge impact.

In 2023, the drinks industry faced the biggest increase in alcohol tax in nearly 50 years, with excise duty on spirits increasing by 10.1% under the Conservative government. As part of the 2024 Autumn Budget, Chancellor Rachel Reeves raised duty again by a further 3.65% in line with inflation.

Hospitality operators are now in need of a stiff one themselves. Margins on mixed drinks and premium spirits are shrinking, while higher prices send customers to cheaper alternatives. Pubs and bars have no choice but to rework menus or offer stripped-back offerings.

While beer and cider qualify for draught duty reliefs, this does not extend to spirits. As a result, there is a pricing disparity between pints and spirits. And although the UK is certainly a nation of pint-lovers, it’s nice to be able to enjoy a more refined beverage occasionally.

In the two years following these increases, the impact on the profitability of nightclubs and bars is clear. The British Beer and Pub Association (BBPA) estimated that 378 pubs were set to close their doors this year; that’s more than one per day. 

Rising drink prices may also be to blame for changes in customer behaviour, such as the growing trend of sober curiosity. Add that to increased business rates, staff shortages, and it’s a challenging environment, to say the least, for pubs, bars, and clubs to stay afloat.

What is the call for evidence—and why now?

The APPG (All-Party Parliamentary Group) for UK Spirits is inviting written submissions from hospitality businesses affected by the increases in spirits duty. 

It aims to explore the economic impact on producers, jobs, competitiveness throughout the sector, investment, innovation, exports, and comparison with other alcoholic beverage categories and international duty regimes. 

The call for evidence is open from 23 July until midnight on 22 August 2025, targeting pubs, bars, nightclubs, and suppliers in the lead-up to October’s Autumn Budget.

A summary report outlining the key findings and potential recommendations will be published in early September, and it will then be submitted to the Treasury to help shape the Government’s approach ahead of the Autumn Statement.

How to respond — and why your voice matters

Businesses of all sizes, big or small, are encouraged to respond and have their voice heard. If you run a pub, bar, or nightclub and have been affected by the increased duties on spirits, you can submit written evidence via APPG’s contact form.

Your evidence doesn’t need to be overly complex or lengthy. It can be a written statement, or even a spreadsheet with relevant data on the impact of the spirits tax on your business.

The APPG’s findings may influence future policy on alcoholic beverages, so this is a rare opportunity for smaller operators to have their say ahead of the next Budget.

As the hospitality crisis deepens, real-world insight from those on the ground in bars, pubs, and clubs is necessary if the industry is to recover.