15 April 2023
‘Keep The Commitment’ Campaign Launched Following Tax Hike in Budget
The Scotch Whisky Association (SWA) has launched a campaign to press the UK government to re-think the decision to increase duty on Scotch Whisky and other spirits by 10.1% from August.
The #KeepTheCommitment campaign will ask the government to uphold the pledge made to the industry in 2019 to “ensure the tax system is supporting Scottish whisky.” Since that promise was made, the tax burden on Scotch Whisky has increased from 70% to 75% of the average priced bottle, and crucially the tax-gap between spirits and other alcohol categories has widened.
The decision to further extend tax breaks for draught products in pubs, bars and restaurants excluded 99% of distillers and increased the tax differential between Scotch Whisky with beer and cider. Per unit of alcohol, the tax gap to beer in the on-trade – already 51% - will rise to 66%, and for cider it will rise from 227% to 260%.
In order to keep the commitment to the industry, the SWA is asking the UK government to allow distillers immediate access to the Energy Bill Relief Scheme, with spirits currently the only alcohol category excluded from the scheme, and a reversal of the 10.1% tax hike due to come into force on 1st August.
Commenting as the campaign launches exactly one month from the UK budget, Chief Executive of the SWA Mark Kent said:
“Over the past month, we have pressed the UK government to rethink the damaging double-digit duty rise on Scotch Whisky.
“It is hugely disappointing that the industry seems to be taken for granted, and that previous pledges that have been made to the industry will not be honoured.
“That is why we have launched the ‘Keep the Commitment’ campaign. We want the UK government to understand what choosing to impose a double-digit duty hike will do to the industry, hospitality businesses and consumers. And we want MPs to support Scotch Whisky, including in the vote next week on the tax increased proposed by the Chancellor.
It is hugely disappointing that the industry seems to be taken for granted, and that previous pledges that have been made to the industry will not be honoured.
- Mark Kent
“By voting against the tax increase, MPs can send a clear message to the Chancellor that he should meet the industry, reconsider the tax rise, and keep the commitment to support Scotch.”
Notes to editors
The #KeepTheCommitment campaign has three clear asks of the UK government:
Ask 1: Reversal of the 10.1% duty increase due to be implemented in August
Ask 2: Immediate inclusion of distillers in the Energy Bill Relief Scheme
Ask 3: The UK government keeps the commitment made to the industry to “ensure the tax system is supporting Scottish Whisky”
On Tuesday 18th April, MPs will vote on the Finance Bill, including the duty increases to spirits. Alistair Carmichael MP has tabled an amendment to the Bill, which would reverse the planned 10.1% increase, taking spirits duty to £31.64 per litre of pure alcohol, and return spirits duty to £28.74
In the Queen’s Speech following the 2019 General Election, the UK government announced the review (p.122) and promised to “review alcohol duty to ensure our tax system is supporting Scottish whisky and gin producers and protecting 42,000 jobs supported by Scotch across the UK.”
The 2019 Conservative manifesto (p.48) recognised the high tax burden on Scotch Whisky. It said “Scotch whisky is a national export that supports 42,000 jobs across the UK. Yet the tax on each bottle of Scotch sold in this country represents almost three quarters of its price. That is why over the past two years we have frozen the duty on spirits, cutting the price of a bottle of Scotch by 30p. Now, we want to do more, which is why we will review alcohol duty to ensure that our tax system is supporting British drink producers.”
Survation conducted an online poll of 1,034 adults aged 18+ in Scotland on behalf of the SWA. Data were weighted to the profile of all Scottish adults aged 18+ Fieldwork was conducted between 10th and 11th March 2023. It found:
- 72% of Scots supported a freeze on Scotch Whisky tax in the budget
- 31% of voters would be less likely to support the Conservatives if the Chancellor raised tax in the budget