Scotch Whisky industry seeks Budget lifeline as over 1,000 jobs shed

The Chancellor has been asked to give a lifeline to distillers in the Autumn Budget as the Scotch Whisky industry revealed there have been massive job losses since a further rise in spirits duty at the last Budget. Over 1,000 direct Scotch industry jobs have been lost since the last Budget, 2.7% of all those directly employed by the sector. And as the industry braces for more bad news in the coming budget, expected in November, as Rachel Reeves seeks to plug a black hole in the nation's finances.

The double whammy of 14% in duty rises over the last two years alone – alongside tariffs in the United States – have left Scotch distillers saying they will reduce investment and see further job losses if taxes once again rise at the Budget this autumn:

• Industry sentiment surveys (Feb-June 2025) show 3 in 4 Scotch Whisky distillers expect to defer or move investment outside the UK due to high duty rates.
• 1 in 4 distillers anticipate job cuts directly linked to 14% duty hike over last two years – many of these jobs will be lost in some of the most fragile economic areas in the country, in rural and island communities.
• 76% of distillers warn that further increases in duty would reduce likelihood of capital investment or recruitment.
• Industry already suffering from losses of £4m a week due to US tariffs

Starmer had previously wooed the sector, saying before last year’s general election (in November 2023): “It’s clear Scotland’s whisky industry isn’t getting the stability it needs from the Tories and the SNP. Labour will put growth at the heart of our government and back Scotch producers to the hilt.”

In a Survation Poll commissioned in November 2024, shortly after Chancellor Rachel Reeves further increased duty on Scotch Whisky, 66% said they believed that the tax rise had broken the commitment made by the Prime Minister.

"The high tax burden is something the government can take action on... Now is the time."

Billy Walker, master distiller at Glenallachie Distillery, Speyside.

Commenting on the pressures facing the sector today, Billy Walker, master distiller at Glenallachie said: “I’ve been in the industry for more than 50 years and rarely, if ever, has there been a time of such peril to the long story of Scotch — tariffs overseas coupled with increasing tax and regulation in our home market.

“Some of the challenges the industry faces the government can’t address, and we accept that. But the high tax burden is something the government can take action on. It is often quoted back to me what the prime minister said, that he would back us to the hilt. Well, now is the time — and the autumn budget is the moment.”

Whisky bosses are set to lay out the stark future the sector faces to Treasury mandarins in the coming weeks in the hope the PM and his Chancellor keep their promise to back the sector. 

Barry O’Sullivan, UK Managing Director of FTSE 100 spirits giant Diageo, said: “We urge the chancellor to support Scotch, a historic, UK homegrown industry that not only supports thousands of jobs but flies the flag for the UK on quality and craftsmanship around the world.”

Scotch Whisky Association Chief Executive Mark Kent said: “Distillers are right to raise the alarm. Job losses and cancelled investment is the same story we hear right across the industry as a direct result of the high domestic tax burden. We know that this will need to be a revenue raising budget, and the only way the Chancellor can do that through alcohol duty is to reduce the tax burden on Scotch Whisky and other spirits. That is self-evident from the government’s own economic data, showing tax rises over the past two years have lost the Treasury over £600m in revenue.”

The industry’s case to the PM and Chancellor will include highlighting hospitality businesses’ dependence on Scotch and other spirits for their own future. Industry figures show 38% of the profits made by bars and restaurants come from spirits.

Matt Macpherson, owner and operator of The Malt Rooms in Inverness said: "Pubs and bars like mine cannot sustain themselves on beer sales alone. While beer plays a role in our overall offer, it is not the core of our business model. However, the current alcohol duty regime appears to disproportionately favour beer, placing venues like ours—where premium spirits, especially Scotch whisky, are central—at a disadvantage.

And Leon Thompson, Executive Director - Scotland, UK Hospitality added: “Those who visit our hospitality venues want to see a diverse selection of cocktails and serves. Spirits like Scotch Whisky are a crucial part of that mix, and for the economic viability of our pubs and bars.”

“Our hospitality sector is hurting in the face of rising business and employment costs, and we know action is necessary to stem the significant job losses the sector has already seen. With spirits accounting for 38% of a venues alcohol profits, action to freeze excise duty would be a welcome help.”

"With spirits accounting for 38% of a venues alcohol profits, action to freeze excise duty would be a welcome help"

Leon Thompson, Executive Director - Scotland, UK Hospitality

At the same time, the sector will highlight that while spirit duties have risen by 14 per cent in just two years, the Office for Budget Responsibility was forced to admit that excise duty collected was £676m lower than expected.

New research from the Scotch Whisky Association shows that versus an RPI increase, forecasts show a freeze of spirits duty would generate an additional £122mn revenue for the Government in 2026/27, cumulative additional £1.03bn tax raised over four years.

For more information, contact pressoffice@swa.org.uk