Whisky report scotches myths over role in UK

whisky(Updated) The Scotch whisky industry today ramped up pressure on the Treasury to recognise its contribution to the UK economy and cut tax.

A hard-hitting report from the Scotch Whisky Association emphasises how the industry’s importance extends beyond Scotland.

It spells out how it adds £5 billion to the British economy and that 5,000 more jobs are employed in the supply chain than five years ago in sectors such as haulage, packaging and glass making.

More than 90% of the whisky industry’s expenditure is spent in the UK on suppliers who are gaining increasing work as the Scotch business expands.

The report, The Economic Impact of Scotch Whisky Production in the UK, produced by 4-Consulting, points out that a cut in duty in the March budget would send a signal that Westminster understands and supports the industry.

One Scotch source said: “There is still a view in some places that Scotch whisky is a small, almost cottage industry that has no relevance to the UK. Perceptions still need to be changed.”

The SWA is a signatory to the Drop the Duty campaign alongside the Wine & Spirit Trade Association and the Taxpayers’ Alliance. Currently, 78% of the price of a bottle of Scotch is tax. An earlier report by Ernst & Young said that a 2% cut in the tax across the spirits industry would encourage investment, create jobs and ultimately raise an extra £1.5 billion for the Exchequer through higher income tax, corporation tax and VAT.

It also claimed the industry’s direct contribution to GDP would rise by £900 million  to £12.7 billion.

Small whisky distillers, including five which launched last year, would benefit from a cut in tax.

The report, first revealed by Daily Business on Sunday, reveals that Scotch whisky is bigger than a number of industries, such as iron and steel, textiles, shipbuilding and computing.

It is also larger than other UK food and drink sectors, including meat, dairy, beer and soft drinks. In Scotland, it makes up almost three quarters of the food and drink sector and is three times the size of Scotland’s digital or life sciences industries.

David Frost, Scotch Whisky Association chief executive, said: “This new report shows just how significant the Scotch Whisky industry is to the wider UK economy, adding £5bn of value, supporting over 40,000 jobs, and contributing £4bn to Britain’s trade performance. Scotch Whisky must be recognised as a cultural asset that boosts growth and jobs, supports communities and combines the best of the traditional and the modern.

“Given the scale and impact of the Scotch Whisky industry we believe the government should show its support. One way of doing so, in the short term, would be for the Chancellor to cut excise duty by 2% in the March Budget. It is unfair on the industry and consumers, and detrimental to the economy, that almost 80% of the average price of a bottle of Scotch is taxation.”




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