UK Scotch decline blamed on ‘unfair’ duty

The Scotch Whisky Association (SWA) has blamed a 3% decline in the UK’s Scotch whisky market on the country’s “unfair” excise duty.

The SWA has attributed a 3% decline in the UK’s Scotch whisky market on the government’s “unfair” tax policies

Figures released by HMRC reveal that the number of 70cl bottles of Scotch whisky released for sale in the UK fell to 87.5 million in 2013, compared to 90m in 2012.

According to Scotch industry body the SWA, this is a result of the country’s “damaging” alcohol duty escalator, which has seen alcohol duty increase 2% above the rate of inflation each year since its introduction in 2008.

In a statement released today, the SWA adds that tax on Scotch whisky has risen 44% over the past five years, while almost 80% of the average price of a bottle of Scotch is now made up if tax and VAT.

David Frost, CEO of the SWA said: “It’s obviously disappointing to see this decline in Scotch whisky volumes in our domestic market. In next week’s Budget the Chancellor has the perfect opportunity to support a vital Scottish industry.

“He should scrap the unfair alcohol duty escalator and freeze duty this year. This move would also benefit consumers and public finances.”

Frost added that since the introduction of the escalator in 2008, the UK market for Scotch whisky has shrunk by more than 15%, losing around 16m bottles.

“Fairer tax treatment would help address this decline in the UK,” he said. “It would send the right message to overseas governments in markets where imported products, such as Scotch Whisky, face discrimination.”

The SWA joined the Wine and Spirits Trade Association (WSTA) and the Taxpayers’ Alliance in launching a new campaign urging Chancellor of the Exchequer George Osborne to scrap the automatic tax escalator and freeze alcohol duty during next week’s Budget statement.

The Call Time on Duty campaign claims that an end to these measures would boost public finances by £230 million and create 6,000 new jobs in 2014.

George Osborne will announce his Budget to Parliament on 19 March.