Industry reacts to 2% UK spirits duty cut

Yesterday UK Chancellor George Osborne announced his “historic decision” to cut spirits duty by 2%, with trade members applauding the “major boost” to the industry this will bring.

The drinks trade has applauded the UK Government’s decision to cut spirits duty by 2%

During the 2015 Budget Statement, Osborne announced a 2% reduction on spirits and cider tax, freezing wine duty and knocking a penny off the price of a pint of beer.

The decision follows strong lobbying by the Scotch Whisky Association (SWA), Wine and Spirit Trade Association (WSTA) and the Tax Payers’ Alliance, which joined forces to launch the Drop the Duty campaign.

The campaign followed that of the previous year’s Call Time on Duty initiative, which saw the Chancellor scrap the automatic tax escalator on alcohol and freeze duty on all spirits.

The SWA said while almost 80% of the price of a bottle of Scotch whisky is tax, the industry contributes nearly £5bn to the UK economy, and is more valuable than the iron and steel trades.

Earlier this month, the association blamed a “disappointing” 5% decline in the UK market for Scotch whisky on the country’s “onerous” level of tax.

Click through the following pages to view the reactions of leading trade members.

Miles Beale – chief executive, WSTA

Miles Beale with the SWA’s David Frost

“We are delighted that the Government has listened to consumers and taken action to address the UK’s excessive spirit duty rates. This small drop in duty will result in a big cheer for the UK’s 24m spirit consumers.

“We are grateful to those MPs who listened to their constituents and supported our campaign and hope that all parties are able to support the measures outlined today and build on them in the next parliament.

“We campaigned for a cut in duty across all products and are disappointed that the UK’s 30m wine consumers did not receive a duty cut too. But freezing wine duty is an improvement and a first step towards supporting wine businesses that are looking to invest in the UK, create jobs and back British pubs.”

David Frost – chief executive, SWA

“This is a historic decision and only the fourth time whisky duty has been cut in a century.

“The Chancellor’s announcement will be toasted across the whisky industry and by consumers who are getting a fairer deal on tax when they have a drink of Scotch. The move is a major boost to our industry as we look to grow again in the UK, and equally sends out an important signal on fair taxation to our export markets.

“The industry is raising a glass to George Osborne and his Treasury team, as well as to all those who have supported our campaign over the last two decades.”

Andrew Cowan – managing director, Diageo Great Britain

“Thousands of people across the nation will this evening raise a happy toast to the Chancellor. The alcohol industry generates billions for the economy and flies the flag for the UK abroad.

“This cut will mean that a 400-year historic industry like Scotch whisky will remain a crucial, and vibrant, part of the British economy for many more years to come.”

Denis O’Flynn – managing director, Pernod Ricard UK

“We are delighted that the Government has confirmed a 2% cut in duty for spirits. This small drop in duty is an important contribution in supporting jobs, growth and investment in the UK spirits industry.

“While it is disappointing that the UK’s 3om wine consumers did not receive a duty cut as well, we are pleased that the Chancellor has chosen to freeze wine duty at its current rate. This is certainly an improvement and a good first step.

“Pernod Ricard UK wishes to acknowledge and thank all the MPs and consumers who have supported the campaign to cut the duty.”

Richard Brierley – of online drinks retailer 31 Dover

“Reducing the fiscal and administrative burden of duty on the members of the burgeoning British craft distilling movement – who are currently excelling around the world – is a positive step towards encouraging the continued growth of this sector. A sector that we continue to champion at 31 Dover.”

Dominic Roskrow – director, The Craft Distillers’ Alliance

“We welcome this cut in duty and are pleased that the Chancellor has acknowledged what a positive contribution spirits producers can make to our economy. The premium end of the spirits sector in particular is a force for good and as the American craft distilling industry has shown, can contribute to the economy by creating new jobs and raising tax revenues.

“Let’s hope this move is more than a cynical pre-election bribe, and that whatever government the United Kingdom gets after May will do more to remove the bureaucratic obstacles which discourage craft distilling in this country.”