Whisky Industry Calls on Chancellor to Fulfil Manifesto Pledge To Scotch

Jeremy Hunt has been urged to freeze duty to fulfil the pledge made in 2019 to “ensure our tax system is supporting Scottish whisky.” 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 £5.5bn 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. 

Commenting on the results of the poll, 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.” 

ENDS

Notes

• In the Queen’s Speech following the 2019 General Election, the UK government announced the review 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.” P122 of this doc:https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/853886/Queen_s_Speech_December_2019_-_background_briefing_notes.pdf
• The 2019 Conservative manifesto 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.” P48 of this doc:https://assets-global.website-files.com/5da42e2cae7ebd3f8bde353c/5dda924905da587992a064ba_Conservative%202019%20Manifesto.pdf

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.

Poll Question: At the next budget on 15 March which of the following potential policy announcements from the Chancellor of the Exchequer would you support or oppose?

Poll Question: To what extent do you believe that decreasing taxes on Scotch whisky would / would not benefit the following in Scotland?

Poll question: Ahead of the 2019 General Election, the Conservative Government made a manifesto commitment to review alcohol duty to ensure our tax system is supporting Scottish whisky. Currently, tax on Scotch in the UK stands at 70%. If the Chancellor raises the duty on Scotch Whisky in next week's budget, would this make you: