2. How has the drinks industry landscape changed since the Budget presented in October 2024? 

The biggest change for industry since the Budget has been the onslaught of tax levies which will land over the course of this year. At the Budget we saw yet another duty increase on all wines and spirits (which came hot on the heels of the largest alcohol tax hike for almost 50 years) and the ending of the easement for wine on 1 February, piling on a painful amount of costly new red tape for wine businesses.  

And the added tax and administration burden for businesses doesn’t stop there - wine and spirit companies are set to face a second round of punishing tax increases when new waste packaging recycling fees, as part of Extended Producer Responsibility (EPR), come into effect in April. 

Unfortunately, that’s not then end of it either! All UK businesses are also dealing with the fallout from rising taxes and overheads announced at the Budget, including increasing National Insurance Contributions and the cut to business rates relief from 75% to 40%. 

When you add on the pressures of stubborn inflation it all adds up to an unforgiving, increasingly expensive and challenging landscape for the drinks industry and its customers. But we’ve navigated choppy waters before, and we are doing our best to make sure businesses are supported and to persuade the Government to listen to industry and make changes that could stimulate the economic growth we all want to see. 

3. Can you break down for us the impact of the alcohol duty increase, which came in force on 1st Feb, and the consequences it might have on the industry and its workforce? 

From 1 February alcohol taxes increased by RPI at 3.6%. At the same time the wine easement was abolished, adding extra red tape as wine too is taxed by strength. This means duty on a bottle of gin increased by 32p, and for wine, at 14.5% abv, it was 54p. Taking into account the duty hikes introduced on 1 August 2023, duty on a 14.5% red wine will have increased by 98p in just 18 months.   

UK businesses are warning customers that they cannot absorb another round of tax increases and so consumers should expect to pay a higher price for their favourite drinks.  

There are no winners under the UK’s punishing alcohol tax regime – higher duty rates mean people buy less, which results in reduced income to the Exchequer. Businesses are being squeezed, and consumers have to pay more. 

The financial impact will be different for every business, but it is estimated that some of the major retailers' face losing millions of pounds. This will have a knock-on effect on producers and distributors who will also find their profits plundered.  The result is a bitter blow for British businesses, large and small. 

4. The Extended Producer Responsibility (EPR) scheme was recently introduced by the Government. How will this scheme affect businesses in the coming years? 

The wine and spirit industry is in favour of better environmental outcomes, and businesses continue to work towards using less packaging and making products more recyclable. But the design and development of EPR has thus far been confusing, badly managed and remains incomplete. And it’s not yet been introduced... 

Defra’s latest estimate for forecast EPR fees for glass of £240 per tonne has come as an unwelcome shock after earlier estimates were much lower, between £110 to £215 a tonne. These substantially higher estimates will fail to reassure obligated businesses that the EPR scheme is in any way ready to be introduced in less than 3 months’ time. The fallout from another exorbitant tax hit will mean another yet price rise for consumers. We continue talks with Government to help them understand that this scheme is not ready to be rolled out. 

5. What are WSTA currently doing to promote sustainable packaging solutions in the drinks industry? 

The WSTA is collaborating with industry partners to drive initiatives that reduce carbon footprints and improve recyclability. We are asking Government to work with us to achieve economic growth side by side with improved environmental outcomes and social responsibility. Glass is one of the most recyclable types of packaging, and the 2 and a half-year delay in the introduction of DRS encourages substitution to other materials. This points towards a worse environmental outcome at a higher cost to business.

Glass should not be included within the scope of Deposit and Return Schemes (DRS) as it undermines kerbside collections for other glass, could increase emissions, and has storage and handling implications for retailers and hospitality businesses. We are particularly concerned that Wales may introduce a unique DRS, just for Wales, or introduce glass re-use without fully understanding the consequences, particularly for imports or SMEs. Recycling is complex and the best way to promote sustainable packaging is to align systems across the UK… and give businesses sufficient time to prepare. 

6. In terms of recycling and packaging, what future trends do you foresee for industry, and what can the wine and spirits industry do to prepare for these changes? 

Alongside the trend away from bottled and towards bulk for imported drinks, producers and manufacturers continue to innovate with all sorts of alternative packaging ideas to reduce material use, including lightweight glass, paper-based bottles and low carbon glass. The industry is proactively investing in research and development and collaborating with supply chain partners to build more sustainable practices for the future. 

7. Last year WSTA, The Drinks Trust and WSET, founded Drinks United, whose mission is to drive coordinated DEI action across the UK Drinks industry to create a culture that reflects and supports its people. Could you tell us more about the project/organisation? 

Drinks United is a cross-industry initiative and is being led by the WSTA, the WSET and The Drinks Trust. We aim to create a UK drinks industry, where everyone feels safe, included and supported. That’s a grand ambition! But we think it’s the right one, and that an industry which supports and empowers its people can tackle some of the systemic challenges – like unsafe workplaces, under-representation, a lack of resources for smaller businesses and individuals – to become one of the best industries to work in that attracts the best talent available.  

Some of Drinks United’s approach is about learning from each other sharing experience and raising the industry standard, for example through making available safeguarding toolkits and best practice through a resource hub. But it’s also about improving diversity and outcomes, for example by using data to make the case for what is, in the end, a change of culture.  

We are doing this by engaging people from across the industry: experts, leaders, advocates and volunteers – all are welcome to support Drinks United. Alongside a small board there is an Advisory Council to help guide, promote and make suggestions. We have four strategic objectives: 

Safe: Establish a culture of safety and harassment prevention 

Supported: Provide and promote accessible DEI resources 

Inclusive: Increase representation and foster inclusivity 

United: Drive industry-led change through collective leadership 

​ In the end Drinks United is a joint endeavour – by the UK drinks industry, for the UK drinks industry, and especially for its future. It aims to support anyone and everyone who works in drinks and any business that operates in our industry. If you want help or eve just to know more please get in touch www.drinksunited.co.uk 

8. What can drinks companies do to support Drinks United, and how can they get involved? 

Companies of all sizes can support Drinks United - and there are several ways to do so: by joining as partners, by offering visible support and promotion, or by sharing resources - from policy templates to event venues - from which others can benefit. We'd love leaders to get involved to share what's working, learn from each other, and have the awkward conversations which need to be had. That way, we create a community and a change that is led by the industry. We also want to hear from experts and volunteers from businesses that want to contribute to our resource hub or join our advisory council. See our website or get in touch to learn more.

9. What future trends do you foresee in the drinks industry and what is WSTA doing to support these changes?  

Some of the future areas of focus for the industry include the growth of the no and low-alcohol sector. We’re working hard with and for our members who produce lower, low and no alcohol drinks to help them navigate the confusing and sometimes conflicting rules on labelling and marketing of these products. We’re also trying to simplify the labelling rules to make sure that consumers have accurate and meaningful information, to help them understand exactly what they are buying.  

Ensuring our members businesses are prepared for new policies is going to be a key focus for the WSTA in 2025 with three areas where new policies are likely to affect our sector: i) environmental policy (“green taxes”), ii) health policy and iii) tariffs. In both of the first two cases the industry is far more likely to minimise the additional costs, regulation and requirements if it acts together to make its case to the UK Government. Whether it's EPR or marketing restrictions or MUP, the alcoholic drinks industry will be seen and treated as a single bloc - and we need to become one: to optimise our strength and magnify our influence.  

10. What are your long-term goals for WSTA, and what do you hope to achieve in the coming years for the wine and spirits industry? 

Our long-term goals focus on securing a fair regulatory environment, fostering innovation and sustainability, and ensuring the UK remains a leading global hub for trading wine and spirits. We aim to support businesses of all sizes, help to reduce red tape and punishing tax rises, as well as to drive industry-wide improvements in environmental responsibility and champion inclusivity. By working closely with our members, government and the wider drinks trade, we will do everything we can to to make our industry resilient and help to create a prosperous, opportunity-rich future for the wine and spirit industry.