Fair Tax for Scotch Whisky
New figures show Scotch is biggest boost for UK balance
But current UK tax of 77% is 'onerous'
On Burns' Night Scotch Whisky industry calls for 2% cut in
The Scotch Whisky Association (SWA) today (25 January) calls for
a 2% spirits excise duty cut to boost an industry that creates £5
billion annually for the economy, supports more than 40,000 jobs
and is the largest net contributor to the UK's balance of trade in
goods, according to new research.
As millions around the globe prepare to raise a dram to
celebrate Burns' Night, research published today - 'The Economic
Impact of Scotch Whisky Production in the UK' - reveals that
without Scotland's national drink the UK's trade deficit in goods
of £115 billion would be 3% larger. The SWA says that the
Government's support of the industry in recent years has led to a
boost in revenue for the Treasury and supported a wave of new
distillery openings - 14 in the past three years.
But tax remains too high at 77% of the price of an average
bottle of Scotch and the SWA is calling for fairer treatment.*
Today's research explains that exports of Scotch Whisky are
worth around £4 billion each year, while imports in the supply
chain, such as packaging for products and casks for maturing
spirit, total only £200 million. The Scotch industry's trade
balance is therefore £3.7bn.
The SWA says the research reinforces Scotch Whisky's position as
a strategically important industry for the UK in terms of value it
adds to the economy, jobs supported, investment and export
performance, and should be supported by government.
The publication of the research on Burns' Night - the
anniversary of the Bard's birthday - comes as the SWA calls on the
UK Government to 'Stand up for Scotch' in the Budget on 8 March to
encourage further investment and job creation.
The onerous 77% tax on an average priced bottle of Scotch exists
despite a freeze in excise in last year's Budget, a 2% cut the
previous year and the scrapping of the alcohol duty escalator -
which annually increased excise by inflation plus 2% - in 2014. The
SWA wants the UK Government to 'pursue a 'Fair Tax for Whisky'.
As well as boosting the Scotch Whisky industry, the government's
changes to excise in the last few years have benefited the public
purse. In the 12 months to the end of October this year, the
Treasury secured around an additional £100m from spirits duty -
including the tax consumers pay on a bottle of Scotch Whisky**. But
the industry says it still deserves fairer tax treatment.
'The Economic Impact of Scotch Whisky Production in the UK'
outlines the true contribution of Scotch Whisky to the economy and
shows why the industry deserves recognition from government.
Findings from the research include:
- Scotch Whisky adds almost £5bn (£4.9bn) to the UK economy;
- Some 40,200 jobs are supported by the industry across the UK.
This includes more than 10,500 people directly employed in
Scotland. Almost £1.3bn is paid in salaries in Scotland;
- Scotch is a significant contributor to rural employment,
supporting often fragile local economies. The industry supports
7,000 rural jobs. The Scotch Whisky industry is expanding at
historic levels. As well as the 14 new distilleries opened since
2013, existing sites have been expanded, for example with increased
production, more warehouses or revamped visitor centres. Up to a
further 40 new distilleries are planned across Scotland, with seven
expected to open this year alone.
But the SWA says the uncertainty created by Brexit means that
the industry needs more reassurance that it will receive fair
treatment from government.
Julie Hesketh-Laird, Scotch Whisky Association acting chief
executive, said: "Scotch Whisky is one of the UK's most
strategically important industries. Without valuable Scotch exports
of around £4 billion a year, the UK's trade deficit in goods would
be 3% larger. And our research published today emphasises the value
of the industry which adds £5bn to the economy annually and
supports more than 40,000 jobs. Burns' Night is the perfect time to
raise a dram to the success of Scotch.
"But we are calling on the government to 'Stand up for Scotch'
by addressing the high and unfair level of taxation distillers face
in their home market. The current tax of 77% on an average priced
bottle of Scotch is a burden on consumers and the industry. And the
Government's own figures indicate that fairer tax treatment leads
to increased revenue for the public purse. We are calling on the UK
Government to cut excise by 2% in next month's Budget, supporting a
great Scottish and British industry at a time of uncertainty,
giving us a stronger domestic platform from which to invest and
grow to make a success of Brexit."
Notes to editors
With media enquiries and to request interviews, please contact:
Rosemary Gallagher, SWA head of communications, 0131 222 9230 or
07432 605 385 or email@example.com
For more detail please see our full report 'Economic Impact
of Scotch Whisky Production in the UK' research (based on 2015
figures, the most recently available) -
The Scotch Whisky impact on the trade deficit calculation is
based on the ONS Publication tables 'UK trade' and the annual
report for 2015 which includes an assessment of the Top 30
*The 77% 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
£7.74 and VAT forms £2.19. Therefore total tax on a bottle is
**In the twelve months to October 2016, spirits duties totalled
£3.2 billion, £99 million (+3.2%) more than a year earlier.