Scotch Whisky industry says excise increase is a blow to a vital UK industry

08 Mar 2017

The Scotch Whisky Association (SWA) says the Chancellor's decision to increase excise duty on spirits by nearly 4% or 36 pence a bottle in today's Budget is a major blow to a key UK industry, undermining competitiveness at a time when the Government should be supporting home-grown exporters. 

As a result of today's increase, the level of tax - excise duty and Vat - on an average priced bottle of Scotch Whisky is now an onerous 79%, one of the highest levels in Europe, and 21% higher than in 2010.  The excise duty burden on a 70cl bottle of Scotch is £8.05 and the total tax is £10.20.

The SWA said it is time for a fundamental review of the alcohol duty system, describing the move as damaging to a major industry and at odds with the Prime Minister's words during a speech in Glasgow last week, where she described Scotch Whisky as 'a truly great Scottish and British industry'.  The Scotch Whisky industry supports more than 40,000 jobs across the UK, many in economically fragile areas, and adds value of around £5 billion annually to the economy.

The increase goes against recent experience that a duty cut would boost the public finances.   Following more supportive duty moves, revenue from spirits duty increased by 4.2%, or £132 million, to £3.25bn in 2016.  The SWA also warned that a duty increase could undermine the recovery of the UK market for Scotch.

Julie Hesketh-Laird, Scotch Whisky Association acting chief executive, said: "A nearly 4% duty rise and a 79% tax burden on a bottle of whisky is a major blow, reversing recent progress.  Distillers will find it hard to understand why the Chancellor is penalising a strategically important British industry with this tax increase.  

"At a time when government should be supporting a key home-grown sector, we face a damaging tax rise on top of the uncertainties of Brexit.   Looking to the autumn Budget, we will be arguing strongly that it is time for a new approach to excise duty outside the constraints of EU excise law.  The system is in need of a fundamental review and reform to make it fair and competitive."

END

The 79% tax (VAT and excise duty) is based on an average selling price of £12.90 for a 70cl bottle (as at September 2016) of Scotch Whisky in the off-trade in the UK. Of that, excise forms £8.05 and VAT forms £2.15. Therefore total tax on a bottle is £10.20.

Duty on spirits is now £28.74 per litre of pure alcohol, up from £27.66.

Duty rate per litre of pure alcohol on spirits 21% higher than 2010.

With media enquiries and to request interviews, please contact: Rosemary Gallagher, SWA head of communications, 0131 222 9230 or 07432 605 385 or rgallagher@swa.org.uk