Level of tax is wrong, says SWA chief
Scotch plots next tax cut plea as public say duty is unfair
Scotch whisky distillers are making an early plea for a further cut in whisky duty by providing evidence that the public believes the present level of tax is “unfair”.
In the March Budget, George Osborne cut the rate of spirits duty by 2%, the first reduction in almost 20 years. The SWA believes that was a “good start” but that more has to be done by the UK Government to support the industry.
In a poll conducted on behalf of the Scotch Whisky Association (SWA), an overwhelming 92% of Scots said that they believed the current tax paid on an average priced bottle of whisky in the UK was unfair.
More than three quarters of the price of a bottle of Scotch (76%) is tax paid to the Exchequer in excise duty and VAT.
The industry believes this to be “onerous” and damaging to the economy. The SWA says that if less tax was levied, more jobs could be safeguarded and smaller businesses could flourish.
The industry supports 117 distilleries, employing more than 10,000 workers and supporting 40,000 others across the UK. It generates £5 billion in value each year.
However, the SWA says the industry cannot be taken for granted. Of those surveyed, 85% agreed that the tax was unfair. Women in particular – 90% of those polled – believed that tax levels were unfair. Drinkers – currently paying around £10 of tax on every bottle they buy.
David Frost, chief executive of the SWA, said: “Thousands of Scots are preparing to celebrate Hogmanay with the traditional glass of Scotch. But almost all of them clearly believe it is wrong that 76% of the price of a bottle of whisky goes straight to the Treasury. We agree that’s unfair too.”
“The bold move by George Osborne in this year’s Budget to cut excise duty by 2% gave a boost to our 117 Scotch Whisky distilleries and across our UK supply chain. But that was the first cut in spirits duty in almost 20 years and was only the fifth time that tax on whisky has ever been cut since distilling became legal in 1832.
“So there’s more to be done and we want the UK Government to build on that first step they’ve taken. It’s an exciting time for an iconic Scottish and British industry that is the envy of the world. An industry that creates jobs but also supports thousands of people who work in hospitality, retail and logistics industries the length and breadth of the UK.”
The SWA’s move comes just weeks after a European court ruled against the Scottish government’s plans to impose a minimum unit price (MUP) on alcohol. The drinks industry, led by the SWA, is campaigning to have legislation on MUP overturned. The court has suggested alternative ways of dealing with excessive drinking, such as the tax system.