Tax hike hits UK Scotch sales

12 Oct 2017

UK Demand for whisky falls by 1 million bottles after damaging duty increase

Scotch industry calls on Philip Hammond to #dropthedramduty

Scotch Whisky sales in the UK have fallen by one million bottles after Chancellor Philip Hammond hiked spirits tax in his March Budget.

Official HMRC figures show 36.7 million bottles were released for sale in the first six months of 2017 - down from 37.7 million in the same period last year.

The 2.6% fall follows the Chancellor's decision to increase spirits duty in the spring Budget by an inflation-busting 3.9%, meaning tax now makes up an astonishing 80% of the cost of a bottle of Scotch. Of an average bottle sold at £12.77, more than £10 goes straight to the Treasury.

Following the drop in domestic demand for Scotch, Philip Hammond is being urged to cut excise duty on spirits to protect the UK's leading food and drink export which supports 40,000 jobs.

The Scotch Whisky Association has launched a Drop The Dram Duty campaign calling on the Chancellor to give fairer tax treatment to spirits in his November budget.

It comes after HMRC figures also show the tax take from spirits has actually fallen since Philip Hammond's spring increase - meaning less money for the Treasury. Spirits revenue was down more than 7% in the first financial quarter of 2017/18 to £697 million from £751m in the same period from April to the end of June the previous year.

In contrast, a 2% cut in 2015 saw spirits revenue rise by 4% - giving a £124 million boost to the Treasury. And a freeze in 2016 led to a revenue increase of more than 7%, pouring an additional £229 million into the Chancellor's coffers.

Karen Betts, Scotch Whisky Association chief executive, said: "Philip Hammond's damaging 3.9% spirits duty hike has hit UK demand for Scotch and seen less money going to the Treasury.

"The Chancellor should use his November Budget to Drop The Dram Duty and boost a great British success story.

"Cutting tax would send a strong signal that the Government believes in a world-famous UK manufacturing industry which supports 40,000 jobs and plays a key role in Scotland's economy."


ENDS


Notes to editors:

Scotch Whisky - tax facts:

An average priced bottle of Scotch Whisky is £12.77. Of this total, excise duty is £8.05, VAT is £2.13, making total tax £10.18, while the whisky is £2.59.

The rate of excise duty per litre of alcohol on Scotch Whisky increased 47% between 2007 and 2017 from £19.56 to £28.74.

£4 in every £5 of the cost of a bottle of Scotch in the UK goes straight to the Treasury.
The UK is the fourth biggest market for Scotch.

Scotch Whisky adds £5 billion annually to the economy, is worth more than £4 billion in exports and supports more than 40,000 jobs across the UK.

For more information on the SWA visit www.scotch-whisky.org.uk and follow us on Twitter @ScotchWhiskySWA

With queries please contact Rosemary Gallagher, SWA head of communications, Tel 0131 222 9230/07432 605385, rgallagher@swa.org.uk