Retailers sold 10 million fewer bottles of wine during the festive trading period than they did the previous year.
Spirits sales also declined by 7.1% in the 12 weeks leading up to Christmas, according to new figures from the Wine & Spirit Trade Association (WSTA).
That is equivalent to 7.7 million fewer bottles of spirits being sold, while beer and cider sales also slumped.
Industry leaders blamed the situation on the government’s decision to increase taxes last August.
Cash-strapped shoppers must now pay an extra 20% in tax on most bottles of wine and more than 10% on full-strength spirits.
They are already struggling to make ends meet amid a cost-of-living crisis, and they responded by cutting back on wine purchases.
The decision to increase taxes has ultimately backfired. The latest government figures show that tax revenues from wine and spirits sales declined by £436m year-on-year between September 2023 and January 2024.
When you add in the losses from beer and cider tax revenues, Treasury coffers were down by almost £600m.
The WSTA urged Chancellor Jeremy Hunt to rectify the situation by cutting alcohol duty and simplifying the tax system when he announces the Budget on Wednesday.
CEO Miles Beale said: ‘Wine and spirits businesses across the country are urging the government to do the right thing at the Budget this week: support British business and boost Treasury coffers by cutting alcohol duty.
‘Record high duty hikes last August have now been shown to achieve the exact opposite – and
