Whisky industry calls on Chancellor to freeze duty on spirits
Jeremy Hunt has been urged to freeze duty to fulfil the pledge made in 2019 to “ensure our tax system is supporting Scottish whisky,” as over two thirds of adults support freezing the duty.
The Chancellor will use his Budget to finalise a long-awaited review of the duty system, but reports suggest whisky drinkers and producers will get nothing— and even see tax rates increase.
The Scotch Whisky Association (SWA) has published a new poll that shows 72% of people support the Chancellor freezing tax on spirits in this week’s budget.
Per unit of alcohol, duty paid on spirits is already significantly higher than the European average, with around £3 in every £4 spent on a bottle of Scotch Whisky going to the treasury as tax. A further increase to spirits duty in the budget would further add to the cost of living and fuel inflation — which the UK government has pledged to halve this year.
The poll, conducted by Survation, also shows Scotch Whisky’s crucial role in supporting the wider supply chain, with 76% believing support for the Scotch Whisky industry will boost hospitality businesses.
Spirits like Scotch Whisky account for 34% of sales in the UK on-trade, but 99% of distillers do not have access to proposed tax breaks in pubs and bars, known as “draught relief.”
The Scotch Whisky industry already contributes more than £5.5 billion to the UK economy every year. The sector supports more than 42,000 UK jobs, employing 11,000 people directly, the majority of whom are in rural communities of Scotland. More than 90% of all UK spirits production is based in Scotland, and the SWA has argued that any increase to spirits duty would put Scotch Whisky distillers at a further competitive disadvantage and disproportionately impact business north of the border.
Mark Kent, chief executive of the Scotch Whisky Association, said: “Distillers across Scotland are waiting for the pledge made in 2019 to be fulfilled. There has been a review of alcohol taxation, but still Scotch Whisky is taxed more than beer, wine or cider and 99% of distillers do not have access to tax breaks available to sales in the on-trade.
“The competitive disadvantage faced by the industry could get worse if the Chancellor further raises tax on Scotch Whisky and other spirits in the Budget this week.
“We urge him to listen to people across Scotland, make good on the commitment to support Scotch Whisky, and freeze duty.”