SWA urges UK Government to abolish alcohol duty escalator
18 Dec 2013
The Chancellor should 'Call Time on
Duty' to be fair to the industry and consumers
Chancellor George Osborne should scrap the alcohol duty
escalator which is damaging the Scotch Whisky industry in its
domestic market and punishing hard-pressed consumers.
The Scotch Whisky Association (SWA) is urging the UK Government
to 'Call Time on Duty' in next year's Budget. Such a step would
recognise the massive contribution of the Scotch Whisky industry to
the UK economy and help people who have seen their cost of living
spiral in recent years.
The 'Call Time on Duty…Be Fair George' campaign, of which the
SWA is a member, launches today to encourage consumers to raise the
issue of the alcohol duty escalator with their MPs. The escalator
is putting further pressure on household budgets at a time when
figures from the Office of National Statistics show salaries are
failing to keep pace with the cost of living. The campaign is
calling on the UK Government to freeze all alcohol duties and scrap
Scotch Whisky exports reached £4.3 billion last year - 25% of UK
food and drink exports - but the Government continues to penalise
the industry in the UK through the alcohol duty escalator. Tax and
VAT now form 79% of the price of an average bottle of Scotch Whisky
sold in the UK.
Scotch Whisky sales have declined by 12% in the UK over the last
five years since the introduction of the escalator. UK sales volume
dropped from 102 million bottles of Scotch Whisky in 2007 to 90
million bottles in 2012.
The alcohol duty escalator was introduced in March 2008 with
duty being increased by 2% above the rate of inflation each year.
Tax on Scotch Whisky has increased by 44% over five years.
In the 2013 Budget the Chancellor decided to single out one part
of the alcoholic drinks industry and remove the duty escalator from
beer, along with a cut in beer duty. As a result, drinkers of a
dram are now paying about 50% more duty than a beer drinker for the
same amount of alcohol.
Independent research by consultancy firm EY shows the UK
Government would also gain from scrapping the escalator across the
board as the drinks industry's contribution to public finances
would increase by £230 million in 2014 alone.
Gavin Hewitt, SWA chief executive said, said: "Our message is
clear - it is time to be fair to consumers and the Scotch Whisky
industry. Tax at almost 80% on the price of a bottle of Scotch
Whisky is unjustifiable. It penalises consumers. It also harshly
treats the Scotch Whisky industry which is vital to the UK's export
performance. The UK is near the top of the league table in taxing
alcohol. This sends the wrong message to overseas governments when
they consider their tax treatment of Scotch Whisky imports."
People can find out more about the 'Call Time on Duty' campaign
NOTES TO EDITORS
For more information contact Rosemary Gallagher, Scotch Whisky
Association communications manager on 0131 222 9230/07432 605 385
or email firstname.lastname@example.org
The 79% figure for tax and VAT is calculated on an average
bottle of Scotch costing £12.70
The SWA is joined in the Call Time on Duty campaign by the Wine
and Spirit Trade Association and the Taxpayers Alliance.
For more information on the campaign please visit www.calltimeonduty.co.uk
For more information on the SWA visit www.scotch-whisky.org.uk
and follow us on Twitter @ScotchWhiskySWA