Support for progressive spirits duty in UK

Craft spirits distillers should be given the same tax relief as craft brewers to encourage businesses to grow, a leading gin producer has advised.

Alex Nicol, founder of Spencerfield Spirit, has voiced support for a progressive spirits duty to help craft distillers

Speaking to The Spirits Business earlier this year, Alex Nicol, founder of Spencerfield Spirit, which produces Edinburgh Gin, said the British government should give the same tax relief for craft spirits producers as it does for craft beer producers to encourage new start-ups.

“To bring craft distilling in line with craft brewing would encourage new business,” said Nicol.

“We are not encouraging reckless drinking by reducing tax.

“If the government wants to encourage us to grow, then stop taxing us so much in the UK.

“If you want craft distillers to do better and invest behind their brands, then they have got to give them a tax relief.”

The Progressive Beer Duty was introduced in the UK in 2002 and enables smaller breweries to pay less tax on their products, as allowed by EU law.

For example, Germany imposed the maximum discount allowed, implementing a 50% discount on beer tax on production levels up to 20 million litres, while the UK opted for up to 3m litres.

However, spirits distillers in the UK must pay the same tax levels regardless of the volumes they produce.

The Scotch Whisky Association (SWA) recently revealed that a the cost of a bottle of Scotch whisky is comprised of 79% tax, while the Craft Gin Club calculated a bottle of gin is made up of about 61% tax.

The Drop the Duty campaign was launched by the SWA, Wine and Spirit Trade Association (WSTA) and the Tax Payers’ Alliance in November last year and calls for a 2% cut in alcohol tax.

Last week, a government minister hinted at the possibility of a 2% tax relief in the next UK Budget on 18 March.