Club Soda’s statement on the Autumn Budget 2026:
Yesterday’s Autumn Budget unfortunately did not go far enough to support the no, low and mid-strength sector and our colleagues in the hospitality industry.
We are disappointed to see that Club Soda’s proposal for a removal of VAT on alcohol-free drinks was not included in the Autumn Budget. At a time when hospitality has grouped together to call for lower costs to business, removing VAT from alcohol-free drinks could’ve been a good middle ground between meeting the industry’s asks as well as the Government’s public health goals. This relatively low-cost policy could’ve supported the potential changes to drink driving rules and public health objectives, while supporting consumers to moderate their drinking by accessing more affordable alcohol-free drinks. Regardless of the outcome, we are proud to have submitted this proposal to the Chancellor for consideration – the first time we have done so – and will continue to lobby the Government for this change in 2027.
We welcome the introduction of a Guest Beer slot in pubs that are tied tenants in England and Wales. This could provide a great opportunity for local no and low beer to feature in a broader range of pubs and support the growth of the category. Additionally, we are pleased to see that the Small Producer Relief in the Alcohol Duty System has been extended to support 2000 small alcohol producers, which could mean small low- and mid-strength alcohol producers will be shielded from rising beer duty costs. The higher duty relief for products below 3.5%ABV is a welcome incentive to support brands to diversify into mid-strength beer which will, in turn, provide more choice for consumers wishing to decrease the number of alcohol units they are consuming. However, we are concerned that the increase in beer duty, paired with an increase in minimum wage, will put producers (outside of the relief scope) and hospitality businesses under mounting pressure as margins get squeezed.
This Budget has reaffirmed the need for the alcohol descriptors to be reviewed and for a single definition of “alcohol-free” to be created. The uprating of the Soft Drinks Levy could see some of our alcohol-free producers subject to higher costs because they are being drawn into the ”soft drinks” definition, rather than being considered as an alcohol alternative. We would like to work with the Government to ensure a definition is set and descriptors are updated.
This Budget has helped parts of the no, low and mid-strength sector, but does not go far enough to support its growth and encourage investment. The Chancellor was cautious with his support so there is still further to go yet. We look forward to working with the Government in the next year on making no, low and mid-strength drinks more visible, available and celebrated.
Laura Willoughby, Founder of Club Soda, commented:
“This Budget offers welcome support for parts of the drinks sector and recognises the value of lower-strength production. But it is disappointing that the government has missed the opportunity to remove VAT from alcohol-free drinks.
“Making alcohol-free choices more affordable would support so many of the government’s own priorities: improving public health, reducing alcohol harm, changes to drink driving rules, backing innovative British businesses and helping hospitality thrive.
“We need a joined-up approach that makes choosing alcohol-free easier and gives producers and venues the confidence to invest. Sorting out the descriptors and removing VAT would be a clear, practical step towards that.”.
