Autumn Budget 2026: Key points for food and agribusiness

Budget measure

What's been announced

Why it matters to agribusiness/food/hospitality

National Living Wage/Minimum Wage

From 1 April 2027, the National Living Wage rises 3.9% to £13.21/hour; the 18–20 rate also rises 3.9% to £11.27.

Potentially significant cost increase: farming, food manufacturing, warehousing, retail, restaurants, pubs and hotels are relatively labour-intensive, so higher statutory wages feed directly into operating costs and may also create pressure on pay grades above the minimum.

Hospitality business rates

From April 2027, Small Business Rate Relief thresholds for qualifying Retail, Hospitality and Leisure (RHL) properties in England rise to £18,000 for 100% relief and £21,000 for tapered relief. About 70,000 more high-street businesses are expected to come out of business rates altogether.

This is positive for smaller hospitality businesses: restaurants, cafés, pubs and food retailers qualifying for the relief should see a direct reduction in property costs. However, properties above £21,000 do not get any of this particular enhanced SBRR. Although this relief applies across the RHL sector it divides it according to size/location.

Rates freeze for other hospitality/retail businesses

Qualifying retail, hospitality and leisure properties in England will receive a real-terms business-rates freeze for 2027-28 and 2028-29.

Positive for restaurants and larger hospitality businesses: limits an otherwise important fixed-cost increase and improves cost certainty.

The test is the use of an individual property and therefore those that are not consumer facing but are downward-facing within the supply chain are not included.

Extra relief for pubs

Pubs, social clubs and all but the largest live music venues receive an additional 20 percentage points of relief from 1 April 2027, taking total relief to 35%. Treasury estimates an average tax cut of more than £3,000 per pub next year.

Particularly favourable to pubs: offsets some of the wage, energy and other operating-cost pressures facing the sector.

However, the budget expressly excludes the very largest live music venues.

Food import tariff suspensions

Tariffs will be suspended on more than 100 additional food products, including plant-based drinks, baked beans, dried fruit and chocolate, until December 2028.

Potential benefit to food manufacturers, importers, retailers and hospitality: cheaper imported ingredients/products could reduce input costs, although UK producers competing with affected imports may face greater price competition. 

The primary objective appears cost of living rather than agricultural trade liberalisation. No significant UK primary agri production looks to be affected from the list provided, but unintended competitive effects remain possible.

Food/drink manufacturing tariff relief

Existing Business Suspensions are being extended on 269 goods, including grape juice (normally 20% tariff) and tomato paste (14%), and businesses will be able to request further tariff suspensions between 11 November 2026 and 3 February 2027.

Important supply-chain opportunity: food/drink manufacturers using imported ingredients should check whether key inputs are covered and whether there is a case for requesting additional suspensions. 

However, equally, UK suppliers could face downward price pressure as an unintended consequence.

Fertiliser tariffs

Tariffs on fertiliser will be temporarily suspended until December 2027. The Treasury expressly says this is intended to lower UK agricultural production costs.

Direct positive for farmers: lowers the potential import cost of a major agricultural input and may feed through into crop and ultimately food-production costs.

Beer/brewing benefit – for example with UK grown malting barley fertiliser is generally a farm input therefore this would have a beneficial indirect commercial effect.

Red diesel

The 3.7p/litre reduction in red-diesel duty is extended for six months to 1 July 2027; Treasury specifically identifies agriculture as a beneficiary.

Direct farming benefit: reduces fuel costs for eligible agricultural machinery during a period of high energy prices.

Road fuel duty

The existing 5p/litre fuel-duty cut is extended and the planned RPI increase deferred until 1 July 2027.

Positive throughout the food chain: farming, food distribution, wholesalers and hospitality all have substantial direct or embedded road-transport costs.

HGV costs

The existing 12-month VED holiday for most HGVs runs to 1 July 2027, with Treasury putting the saving at £600 for a typical HGV.

Useful for food logistics: reduces the cost burden on hauliers moving agricultural commodities and temperature-controlled/ambient food around the UK.

Alcohol: Small Producer Relief (SPR)

From 1 February 2027, Small Producer Relief becomes more generous, with £10m a year of support benefiting over 2,000 small alcohol producers. The discount taper below 3.5% ABV becomes more generous and the marginal discount for 3.5%–8.4% ABV is uprated by RPI+10%.

This reduces alcohol-duty burden and increases the incentive for lower-strength production for small producers. 

It sits within the government’s post 2023 strength-based alcohol duty strategy. By making the taper more generous for drinks below 3.5% ABV it is intended to “strengthen incentives to produce lower-strength products”.

Guest beer/pubs

Government intends to introduce a“Guest Beer” provision into the Pubs Code in England and Wales.

This sits along the SPR on alcohol (above) with the stated purpose of helping brewers obtain access to the market while giving consumers a greater choice of beers in pubs.

Potential commercial opportunity for breweries.

Energy-intensive manufacturers

From April 2027 the British Industrial Competitiveness Scheme (BICS) will provide 10,000 energy-intensive manufacturing firms with a 20–25% electricity discount, including a back payment for 2026-27.

Potentially important for qualifying food manufacturers: electricity-intensive processing, refrigeration and production operations could benefit if they fall within the eligibility rules.

NB: Eligibility is no based simply on being energy intensive and must be assessed by manufacturing activity (SIC code), product (HS Code), electricity use and individual manufacturing site.

Climate Change Levy

Main rates for electricity and LPG are frozen, while gas and solid-fuel rates are to rise by RPI from 1 April 2028.

Mixed: assists businesses dependent on electricity/LPG but indicates future additional pressure for gas-intensive food manufacturing or heating operations.

Capital allowances

From 1 January 2027 the main-rate first-year allowance rises to 50%, while the main writing-down allowance falls to 12% from April 2027.

Mixed but investment-relevant: increases the upfront tax incentive for qualifying investment, relevant to processing machinery, plant, automation and other capital-intensive agri-food investment, although subsequent writing-down relief is lower.

No headline VAT/NIC rate increase

The government says there will be no increase in headline rates of income tax, National Insurance contributions or VAT.

No change for employers/hospitality: businesses avoid an additional Budget-day increase in these headline tax rates, although the wage increase remains a material employment-cost issue.  But it isn’t a freeze on employment costs overall. The budget increases the National Living Wage so businesses employing staff at or close to the minimum wage will still experience an increase.