Whisky leaders push case for duty cut with Treasury
The claim the 80% tax on spirits is putting pressures on the industry and are calling for a 2% cut which they say would be repaid in taxes from extra consumption.
While the SWA welcomed the Chancellor’s decision to scrap the alcohol duty escalator and freeze excise in last year’s Budget it said more has to be done to support the industry.
The Scotch Whisky industry contributes almost £5 billion to the UK economy and supports more than 40,000 jobs, but it says its growth is being stifled by the current excise regime.
It says a cut in duty would add to the £1.8bn it already spends annually on supplies, such as bottles and packaging.
The SWA excise on Scotch is 44% – or £2.42 a bottle – higher than when the escalator was introduced in 2008. It points out that duty on Scotch has only been cut three times in the last century and reminded Ms Patel that Scotch exports were down 6% in volume and 11% in value in the first half of last year. The tax burden in the UK, it says, encourages discrimination against Scotch in overseas markets.
David Frost, chief executive of the SWA, said the meeting with Ms Patel was constructive. “The Minister clearly understands Scotch whisky’s economic importance and we welcome her interest in the industry, he said.
“In the UK, Scotch Whisky is under sustained pressure from taxation. In last year’s Budget, the Chancellor highlighted Scotch Whisky as a ‘huge British success story’. We hope this year too he will show his support for this world-class manufacturing industry, which adds £5bn to the UK economy and £4bn net to the UK trade performance every year.
“We hope the Government will back us by cutting duty by 2% for Scotch Whisky this year. This would be fair to consumers, send a powerful signal to export markets, support public finances, and most of all promote investment and jobs.”
The SWA outlined its Budget case to the Chief Secretary to the Treasury, Danny Alexander, at a meeting last month.