With the UK general election fast approaching, The Scotch Whisky Association has urged all parties to rule out any increases in duty on whisky.
In August 2023, the Conservative government raised duty by 10.1%, which was then frozen in the November autumn statement. This consequently means the UK has the highest excise duty in the G7 and almost double the average duty rate when compared to European nations.
Whisky is taxed at a much higher rate than beer, wine, or cider, with roughly 73% of the cost of a bottle of Scotch in the UK claimed in tax.
A survey by the UK Spirits Alliance in November last year following the duty hike showed that almost half of spirits producers feared the increase cost would lead to reduced consumer demand for their produce. 61% of respondents stated they would have to reduce production to cut costs, while 70% feared the hike would be detrimental to their ability to reinvest in and grow their business.
With that in mind, the SWA are calling for the next government to go beyond the last duty freeze and reduce the duty burden. It hopes that UK excise duty will be on a par with the European Union average by the end of the next parliament.
Mark Kent, SWA chief executive, said “Scotch Whisky is a cornerstone of the Scottish economy. [We] want candidates across political parties to recognise [this]. That means ruling out further increases in excise duty after last year’s devastating tax hike, which has ultimately cost the Treasury over £100 million, money that could’ve been used to support public services.
“Spirits like Scotch Whisky are taxed up to four times more than beer and cider. That is unfair, and something the next government must put right.”
He added: “Ruling out further tax hikes and reducing the tax burden over the next Parliament would be backed by voters, and a clear sign of support for Scotland’s flagship industry.”
Indeed, there appears to be an element of public support for the proposal. Polling conducted by Survation found that four in five people in Scotland believe Scotch is important for the economy. 90% of those surveyed think that Scotch whisky is an important export and 91% believe whisky is important for Scottish tourism.
This belief is backed up by data as well. Figures published by the SWA earlier this year showed Scotch exports exceeded £5.6 billion in 2023. This equated to roughly 1.32 billion bottles. Overall there was a 14% rise in value and 3% rise in volume when compared to pre-pandemic numbers.
So what have the main political parties offered to such a valuable industry while on the campaign trail. Surprisingly little, it seems.
Labour are projected to oust the Conservatives from Westminster, but neither party mention alcohol duty in their manifestos. The Conservatives have pledged to continue their Brexit Pubs Guarantee, but this has been criticised for not doing enough for whisky and only cementing the disparity between how alcoholic spirits are treated when compared to beer, cider, and wine.
In Scotland, the SNP advocate full devolution of tax powers to Holyrood, but there’s no specific mention of alcohol duty or the Scotch whisky industry.
Douglas Ross and Alistair Carmichael - the leader of the Scottish Conservatives and the Liberal Democrat candidate for Orkney & Shetland respectively - have both publicly come out in support of the Scotch whisky industry, but they fell short of explicitly saying they would lower duty rates.
In a slightly lighter take on the election, a recent study by More in Common revealed how people’s voting intention matched their drinks preferences. 43% of those who selected whisky as their drink of choice said they are most likely to vote Labour. Of course this doesn’t mean that almost half of the British public think Labour would be ‘better’ for the whisky industry, but it’s a fun aside all the same.
Hopefully, whoever ends up with the keys to No.10 Downing Street - or, perhaps more fittingly, whoever sits in No.11, traditionally the official residence of the Chancellor of The Exchequer - at least listens to what the SWA and the wider whisky industry has to say.
Obviously we’re biased. We love whisky and don’t want to see any harm come to the industry. Nevertheless the concerns raised are very real. Any negative effects suffered by the industry will be felt not just by us whisky fans, but also by local communities and the wider UK economy as a whole.