Drinks prices could rise after the 2026 Budget
Drinkers in the UK may face higher prices following the 2026 Budget, with Chancellor John Healey reportedly planning another increase in alcohol duty, reports BritPanorama.
Smokers and vapers have already experienced price increases due to changes implemented earlier this month. A new Vaping Products Duty took effect on October 1, affecting e-liquids, while tobacco duties were increased simultaneously.
The Budget is set to be delivered on Wednesday, October 28, with the specifics of any additional tax measures still yet to be confirmed. There is speculation that tax adjustments could impact the price of a pint of beer, a packet of cigarettes, and vape refills significantly.
An increase in alcohol duty aligned with the Retail Prices Index (RPI) could add as much as 2p to the cost of a typical pint. With RPI inflation at 3.9% as of September, the duty increase on beer could rise from approximately 50p to 52p. Additionally, estimates suggest that duty on wine could increase by around 10p to 12p based on its strength, while a 70cl bottle of gin could see an additional charge of approximately 35p.
However, these figures represent possible tax increases and do not guarantee similar hikes in retail prices, as businesses retain the discretion to determine how much of the increased tax they will pass on to consumers. Other factors such as VAT and rising production costs will also influence the final prices consumers pay at shops and pubs.
The last rise in alcohol duty occurred on February 1, 2026, when rates increased by 3.66%. Industry advocates have urged the government to freeze alcohol duties, warning that further increases would exert additional pressure on both businesses and customers.
Are cigarette prices going up in the Budget?
Tobacco duty already increased on October 1, 2026. The changes, based on previous Budget announcements, were expected to add £1.21 to a packet of 20 cigarettes and £2.54 to a 30g pouch of rolling tobacco. These increases combined the Government’s annual tobacco duty escalator—which is inflation plus two percentage points—with an additional one-off rise.
It should be noted that a specific increase in tobacco duty related to the upcoming Budget has not yet been confirmed, as the annual increment was already timed to coincide with the new duty on vaping products.
Will vaping products become more expensive?
The new Vaping Products Duty institutes a charge of £2.20 per 10ml of e-liquid, regardless of nicotine content. This translates to 44p for a 2ml pod and £2.20 for a 10ml refill, with manufacturers and importers responsible for the tax—though some costs may be passed on to consumers.
This existing tax mechanism remains unchanged after the current year’s Budget, but any potential adjustments to vaping duties will depend on upcoming governmental announcements.
When could price rises take effect?
The current alcohol duty rates are set to remain in place until January 2027, with another review anticipated for February 1, 2027. Mr. Healey’s upcoming Budget will ultimately determine whether and when a reported duty increase will take effect.
Furthermore, while any tax hikes are anticipated, they do not automatically result in the same increase in final consumer prices at retail points.
Such fiscal measures continue to illustrate the government’s approach to public health by taxing products deemed harmful, even as they navigate the complexities of economic pressures faced by consumers and businesses alike.
