SWA blames ‘disappointing’ Scotch decline on tax

The UK’s Scotch whisky market declined by 5% last year, with industry members blaming the country’s “onerous” level of tax.

The UK market for Scotch whisky retracted 5% last year, the SWA has claimed

According to figures released by the Scotch Whisky Association (SWA), the number of 70cl bottles of Scotch released for sale in the UK in 2014 fell to 83.3 million, down 4.78% from 87.5m in 2013.

Citing HMRC data, the association claims that in the last five years – since 2009 – the UK market for Scotch has shrunk by 9.5% from 92m bottles.

As such, it has once again called on the UK government to lower taxation on spirits, claiming almost 80% of the price of a bottle of Scotch counts as duty. The association is urging chancellor George Osborne to cut spirits duty by 2% when he announces the 2015 Budget Statement next Wednesday 18 March.

Last year, the chancellor scrapped the automatic tax escalator on alcohol and also froze duty on all spirits, but the SWA claims more needs to be done to support the industry.

“Scotch whisky is a massive export success for the UK so it’s obviously disappointing to see this decline in volumes in our domestic market,” said David Frost, chief executive of the SWA.

“In next week’s Budget the Chancellor has the perfect opportunity to support an important UK industry. He should cut spirits duty by 2%. This move would also benefit consumers and public finances.

“In last year’s Budget, the Chancellor highlighted Scotch Whisky as a ‘huge British success story’. We hope this year too he will show his support for this world-class manufacturing industry.”

Earlier this year, the SWA published the findings of a report it had commissioned looking at the economic impact of the Scotch sector. The paper claimed that the industry is now more valuable than iron or steel, contributing nearly £5bn to the UK economy.

However, the industry has criticised the fact that duty on Scotch has only been cut three times in the past century, while British drinkers contribute one quarter of all excise duty paid on spirits in the European Union.

It was recently revealed that exports of Scotch whisky had continued to decline in the first half of 2014, as the Chinese and Latin American markets continued to bite.

The SWA joined forces with the the Wine and Spirit Trade Association (WSTA) and the Tax Payers’ Alliance to launch the Drop the Duty campaign, lobbying the government for a 2% spirits tax break.