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Drinks firms want Budget action

Distillers across UK unite to call for duty cut

whiskySmall distillers have joined the call for Chancellor George Osborne to cut the rate of duty on alcohol which the industry claims will bring more revenue into the Treasury.

The ‘Drop the Duty!’ campaign is being run by the Scotch Whisky Association (SWA), Wine and Spirit Trade Association (WSTA) and supported by the TaxPayers’ Alliance. The campaign is calling for a 2% cut in alcohol duty in the March budget.

Campaigners say this would raise £1.5 billion through increased investment across the industry, greater income from corporation tax and VAT, and from the benefits of jobs created in pubs, bars, restaurants, shops and the wider supply chain.

UK consumers currently pay nearly 80% tax on an average priced bottle of spirits and almost 60% on an average priced bottle of wine. This equates to consumers paying £10.06 in tax on an average bottle of whisky.

“The British public is also against this tax, with 84% saying that this level of tax on Scotch Whisky and other spirits is unfair,” says the SWA.

Today, the UK’s smaller producers said the tax rates are stifling their growth ambitions. Commenting on the campaign, Dom Roskrow, director of the Craft Distillers’ Alliance (CDA), said:  “The UK spirits industry has grown rapidly over the last 18 months largely due to the successes of craft distillers.

“Up and down the country there are small distilleries creating jobs, boosting tourism and raising tax revenue in towns and cities. The government should be doing all it can to develop and encourage growth in this industry rather than focusing on punitive tax measures.”

Ian Hart, founder of Sacred Spirits Company in London, said:  “Our burgeoning craft spirits industry is significantly held back by the current exorbitant duty regime.”

Stephen Davies, managing director of Penderyn Distillery in the Brecon Beacons National Park, commented: “As a craft distiller in the UK, we feel the strain of the alcohol duty on our business.”

Anthony Wills, founder and manager director of Kilchoman Distillery on Islay, added “The whisky industry welcomed last year’s duty freeze, but with tax still accounting for nearly 80% of an average bottle’s price more action is needed.  The UK is vital for many new and small distillers, both as a key market but also a base to grow exports in the future. A 2% duty cut would be a significant boost to investment in the sector.”

David Frost, SWA chief executive, said small distillers and British consumers are being unfairly penalised.  “Not only is the spirits tax rate the fourth highest in the European Union, it is double the rate applied in France and two and a half times higher than in Germany.  We are calling on the Chancellor to build on last year’s duty freeze to support an important, home-grown industry.”

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