SWA Budget Submission 2014

13 Feb 2014

Executive Summary

Scotch Whisky in the UK is under sustained pressure from annual above inflation excise duty increases, which are damaging a home market already in long-term decline. 

UK volumes of Scotch Whisky are 12% down since the escalator was introduced and 21% lower than a decade ago, a loss of 23.5 million 70cl bottles of whisky from the market between 2003 and 2012.  Over that period, Scotch Whisky's share of the UK spirits market has fallen from 30% to 23%.

No other consumer product faces such a punitive tax burden:

  • Nearly 80% of an average priced bottle is accounted for by tax to the Exchequer. 
  • Excise duty on whisky has increased by 44% - or £2.42 a bottle - since the alcohol duty escalator was introduced.
  • Whisky drinkers pay 48% more duty on the same amount of alcohol than beer drinkers.

Scotch Whisky Association members believe strongly that enough is enough. 

The 2013 Budget was a significant blow to distillers.  One category - beer - received favourable treatment.  As a result, conditions became more difficult for those distillers that rely on a healthy UK market and need a firm base to deliver future export growth. 

Changing this policy and removing the escalator on spirits and wine would signal a fair and equitable approach to the drinks market, create 6,000 additional jobs, and deliver £230 million in extra revenue to the UK public finances in 2014.

It would enable the Government to deliver on its commitment to support local pubs and communities, as well as an industry supply chain that supports 35,000 jobs in the UK.   It would underpin investment and employment across many economically fragile rural and urban areas of Scotland. 

In short, it would be an outcome that would be good for consumers, government, and business.  We urge the Government to implement reform this year.  

In Budget 2014, The Scotch Whisky Association is therefore calling for:

  • immediate removal of the excise duty escalator on Scotch Whisky 
  • all alcohol duties to be frozen.