Spirits drive growth in alcohol revenue over past decade

The Scotch Whisky Association (SWA) has released figures which show that the spirits category has driven growth in alcohol revenue over the past decade.

The official HMRC figures show that spirits revenue from excise duty grew to £4.12bn in 2022/23 – up 40% since 2013/14. This is in contrast to the beer industry which grew revenue by only 7% and the cider revenue falling by 28%. This is despite the fact that cider has had the same tax treatment as spirits over the ten-year period, and beer given one additional freeze in duty than spirits.

Spirits now account for 33% of all alcohol revenue, up from 29% in 2013/14.

The SWA launched the #KeepTheCommitment campaign in April, a month on from the HM Treasury decision to increase duty on Scotch Whisky and other spirits by 10.1% from August and give further tax breaks to beer and cider in pubs and other on-trade businesses. The SWA is asking the government to uphold the pledge made to the industry in 2019 to “ensure the tax system is supporting Scottish whisky.”

These new figures remove any doubt that freezes to spirits duty have benefited HM Treasury revenue – and show that supporting spirits like Scotch Whisky through the tax system brings greater fiscal benefits than supporting other alcohol categories.

Commenting on the figures, Chief Executive of the SWA Mark Kent said:

“The Chancellor’s reference to ‘warm ale’ in his Budget speech in March showed that out-dated views of the UK’s alcohol industry persist where the industry’s duty rates are set. Pubs and other on-trade businesses are about far more than beer and cider, and the modern consumer is looking for a premium experience, with the majority drinking less and drinking better over time.

“This suits the Scotch Whisky industry which is made to be measured and savoured, and these figures make clear that it also suits the government’s bank balance. Growing revenue by 40% over a decade when fewer units of alcohol have been consumed is an impressive return on the government’s investment in the industry through previous duty freezes. In contrast, at least the same tax support has been given to other alcohol categories but without the same benefit to Treasury coffers.

“HM Treasury would not have continued to support Scotch Whisky at annual Budgets if it was not beneficial to the public finances. The official HMRC figures show that previous freezes have driven government revenue, and the spirits category has driven this growth as the increasing choice of the modern consumer.

“The industry wants the commitment the government made to distillers to be honoured. These figures should be a wake up call for the Chancellor to cancel the retrograde tax hike and once again support Scotch.”

Ends

HMRC revenue figures from 2022/23 are available here. They show that:

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”