The bitter aftertaste behind Britain’s drinks trade boomlet

Britain’s drinks trade looks lively on the surface. Taprooms still brim at weekends, soft drink aisles groan with “guilt-free” cans, and the no-and-low wave keeps rolling. Scratch the label and a tougher story appears. Quiet bar closures, changing rules on tax and labelling, and a reshaped power map after mega-deals are forcing producers and venues to rewrite their playbooks in real time.

Late nights, early warnings

Ministers want pubs, clubs and restaurants to open later, folding a new “economic growth” objective into licensing law. Trade bodies praise the intent, but local authorities, public health groups and parts of the industry warn that Whitehall is reaching for a blunt tool while alcohol-specific deaths sit at record highs. The plan would centralise more licensing policy and reduce local sway, a move critics say risks higher policing and healthcare costs without solving weak midweek demand.

Pushback has grown as details land. Letters pages fill with concerns that longer hours do not fix the structural issues, from squeezed household budgets to staff shortages, that keep tills quiet. The political bet is that later opening creates growth. The counter-argument is that it simply stretches the same spend across more hours while shifting costs to public services.

Sugar, reformulation and moving goalposts

Soft drinks makers face a fresh hit. The Treasury is consulting on “strengthening” the Soft Drinks Industry Levy by dropping the entry threshold from 5 grams to 4 grams sugar per 100 ml and by revisiting exemptions for dairy and dairy-alternatives. For brands that already spent millions reformulating in 2018, this is Groundhog Day. Expect hurried R&D, costlier recipes and another wave of “new taste” labels. HM Treasury says final policy will be confirmed at the Autumn Budget 2025, so the window for lobbying and technical modelling is now.

Trade press reports suggest the widened levy would catch products that previously skated below the line, potentially including household names. Operators warn the health gains could be marginal while investment plans get paused or pulled. Regardless, planners in grocery and hospitality should model price points and formats assuming a broader levy net in 2026.

The 0.5 per cent question

Another long-running wrangle is close to resolution. The government has signalled support for aligning the definition of “alcohol-free” with international norms at 0.5 per cent ABV, up from England’s current 0.05 per cent. Producers argue the change cuts consumer confusion and unlocks innovation, especially for beer where brewing to 0.5 per cent is far less technically punishing than 0.05 per cent. A 2023 consultation mapped today’s messy labelling landscape, and industry analysis suggests a shift would catalyse the category rather than blunt it.

For planners, the prize is not just better liquids. It is scale. IWSR data shows no-alcohol volumes growing faster than total beverage alcohol, with the category expected to expand at about 7 per cent CAGR to 2028. Beer leads, but RTDs, wine and spirits are steadily taking share. If 0.5 per cent becomes the legal line, UK products slot cleanly into export markets and procurement teams can simplify ranging rules across groups.

Consolidation, power and a new kingmaker

The biggest chess move landed this year. Carlsberg completed its acquisition of Britvic, creating Carlsberg Britvic, an integrated beer and soft drinks giant with PepsiCo ties and distribution muscle across both wet-led and mixed estates. Expect faster route-to-market for cross-portfolio plays, new bundling in tenders, and firmer leverage on space, price and activation. For independents, that means sharper negotiation and clearer points of difference on menus and shelves.

The new entity is already flexing. Recent announcements include exclusive UK distribution for on-trend US functional sodas, a sign that wellness-adjacent products will be pushed through traditional on-trade pipes. For rivals, this is a shot across the bows that the soft drinks battleground now runs straight through draught beer territory and back again.

Closures that speak louder than campaigns

Brand marketing still sparkles, but P&L realities bite. BrewDog, once the poster child for relentless expansion, is shuttering ten UK bars, including flagship sites, after a strategic review. Management frames it as pruning to grow, yet the signal to landlords, lenders and operators is clear. Even high-awareness brands cannot outrun rent, rates, energy and labour if unit economics fail. The closures also coincide with a wider on-trade reset, as some pub groups cull marginal sites and renegotiate leases.

Duty, wine and the price ratchet

From February 2025 the grace period on wine duty ended and tax moved fully onto a strength-based system. Retailers warn of heavier admin, shelf resets and upward price nudges, particularly for styles that creep over key ABV bands. For consumers already trading down, that risks accelerating a shift to private label, boxed formats or to entirely different categories. For restaurants, list engineering and glass-pour strategy matter more than ever.

What smart operators are doing now

Rebuild the model with new levies baked in. Assume the broader sugar levy and stress-test your price ladder, pack sizes and margin by channel. If you supply milk-based or plant-based drinks, run lactose and process sugar scenarios so you are not caught in a late compliance scramble.

Exploit no-and-low where it truly adds spend. The growth is real, but it is not automatic profit. Range to occasions rather than hype, use 0.5 per cent beers to anchor moderation sets, and write service scripts that upsell food or premium mixers alongside. Track rate of sale weekly and cut slow movers quickly.

Negotiate harder with the new giants. Carlsberg Britvic’s breadth is a threat and an opportunity. Push for joint activation that drives all-day parts, not just Friday nights, and protect your menu balance so one supplier does not dictate the fridge. Independent packs that tell a provenance story can live beside power brands if you defend the space.

Design for realistic trading hours. Longer hours might arrive, but payroll and security costs rise with the clock. Model incremental gross profit by hour, by day, and do not be shy about closing when the numbers fail. If your council pilots later licensing, insist on evidence reviews and keep your community onside.

Engineer wine lists by ABV. Re-cost every line by strength. Where styles risk sticker shock, consider tighter by-the-glass curation, smaller formats, or switching to regions that deliver flavour at lower ABV. Train staff to explain the change without sounding apologetic.

The exposed truth

The UK drinks story in late 2025 is not a morality play about good or bad products. It is a cash-flow story shaped by policy choices, corporate scale and consumer caution. Some rules will tilt the pitch, some deals will centralise power, and some closures will clean up over-extended estates. The winners will be those who adapt faster than the consultation cycle, who understand that “growth” is not the same as “profit”, and who remember the obvious lesson that too many forgot during the boom years. Not every tap needs to be on, and not every hour needs to be open.