Drinks sector sounds alarm as UK spending review snubs hospitality

Key trade bodies say the UK Government’s latest spending review risks undermining a fragile recovery in the drinks and hospitality sectors. Industry leaders are calling for urgent tax reform, investment in transport and targeted support for independent venues and producers. Nicola Bates, CEO of WineGB, did not mince words following the Government's latest Spending Review. “Our farmers and wine businesses are fed up,” she said, expressing deep concern at the anticipated cuts to Defra’s budget. Despite contributing “millions to the Treasury in duty and other business payments,” Bates pointed out that the industry “gets very little in return.” WineGB is calling for more concrete support from the Government to underpin the UK’s growing reputation as a world-class wine producer and rural job creator. While welcoming the review’s pledges for a “digitally enabled state” and more skills funding, Bates cautioned that these ambitions appear “more aspirational than grounded in reality.” She stressed: “There are large assumptions of efficiencies… if these are not achieved, we need to be assured that support for food and drinks businesses will not be targeted instead.” Ultimately, WineGB says the review offers “barely any support” for vineyards and warns that the current direction risks stalling growth in a promising, homegrown sector.

Hospitality sector still shouldering disproportionate burden

Kate Nicholls, chief executive of UKHospitality, acknowledged some positives in the review, namely investment in skills and regional transport, but argued they were nowhere near enough to offset the mounting pressures on the sector. “The overwhelming challenge holding back hospitality from meeting its potential is the current tax burden imposed upon it,” Nicholls said, calling for business rates reform and a reduction in operating costs. As the drinks business recently reported, one-third of hospitality businesses are now operating at a loss, up 11% from the previous quarter. Industry bodies, including the British Beer & Pub Association and Hospitality Ulster, blamed increased National Insurance Contributions and rising business rates. The burden is translating into job cuts, reduced hours, and scrapped investment plans. In a joint statement, trade groups warned that “jobs are being lost, livelihoods under threat,” and added that unless the Government reverses course on tax and rate hikes, its own economic targets “look doomed to fail.”

Beer and pub sector sees contradiction in growth rhetoric

Responding on social media, the British Beer & Pub Association said the Government’s growth narrative rang hollow without real backing for pubs and brewers. “The Spending Review 2025 once again sets the stage for Labour's plan for growth, but with rising costs and squeezed margins, we urge Ministers and Mayors to act and back our sector in national policymaking and Local Growth Plans,” the BBPA posted on X. Citing a contribution of £34.3 billion to the economy last year and £18 billion in tax, the BBPA highlighted the closure of nearly 300 pubs across England and Wales in 2024 alone. They are now calling for “meaningful business rates reform and a reduction in beer duty” to help stem job losses and revitalise high streets.

Night time economy: growth flickers under threat

The Night Time Industries Association (NTIA) offered one of the starkest warnings yet, citing new research showing a 15.8% drop in independent venues since March 2020. “While our sector is remarkably resilient, modest figures of growth should not be mistaken for recovery,” said NTIA CEO Michael Kill. “The reality is the night time economy remains in a deep crisis of the Government’s doing.” According to the latest NTIA Market Monitor, while nightclub numbers grew 5.4% in the past year, the first such growth since 2020, the sector remains down over 34% in total venues. Footfall after 1am continues to fall, and sales after 9pm have dropped significantly. A flash survey of over 500 businesses showed that more than 90% have cut or plan to cut jobs, hours, or investment. Without financial support, 40% expect to close within six months. The NTIA is urgently calling for VAT cuts, relief on National Insurance and business rates, investment in transport and formal Government recognition of the night time economy’s cultural and economic value.

A call for urgent reform

The picture across the drinks and hospitality sectors is clear: mounting costs, unclear investment priorities and limited sector-specific support are threatening a fragile recovery. While there are signs of adaptation and innovation, from experience-led socialising to growth in cocktail and themed bars, industry leaders warn that resilience has its limits. From vineyards to venues, the message is consistent: without swift and meaningful Government action, an industry central to the UK’s economic, cultural and rural landscape risks stagnation, or worse, irreversible decline.