Distillers urge multi-year duty freeze in autumn budget
Several trade groups representing hundreds of distilleries across the UK have written to chancellor Rachel Reeves urging a multi-year spirits duty freeze.
The open letter was penned by the Scotch Whisky Association (SWA), the UK Spirits Alliance (UKSA), the Welsh Whisky Association, the English Whisky Guild and Drinks Ireland.
They have called for a duty freeze in the autumn budget, scheduled to be announced on 26 November, citing the “disproportionate tax burden” the duty hikes over the past couple of years have put on the entire spirits supply chain.
Already this month, the SWA has warned that the government cannot “tax our way to growth”.
Mark Kent, chief executive of the SWA, commented on the letter: “The chancellor must listen to the warning signs – the sector-wide job losses, the falling Treasury revenue, the sluggish growth of the UK economy – and move to support the distilled spirits sector with a long-term excise duty freeze in the autumn.
“Distillers in Scotland want to grow, export and thrive, but those ambitions must be fostered by a competitive domestic environment.
“Freezing duty would go some way to alleviating the pressure faced by Scotch whisky producers, who are facing multiple global headwinds.”
Morag Garden, chief executive of the English Whisky Guild, also voiced the importance of a tax freeze for the industry. English whisky has been growing well in recent years, and is in the midst of securing a geographical indication (GI).
Garden said: “Every region of England is now home to at least one English whisky distillery, each playing a vital role in supporting local economies and attracting tourism. This is a growing success story for UK spirits, but it needs a stable foundation to thrive.
“By committing to a multi-year freeze on excise duty, the government can back UK distillers, safeguard jobs, and unlock further investment in communities across the country.”
Additional signatories of the open letter are: Ian Smith, chair of the UK Spirits Alliance; Stephen Davies, director of the Welsh Whisky Association; and Aengus King, director of Drinks Ireland.
The open letter
The letter in full reads as follows: “As organisations representing spirits brands of all sizes throughout the UK, we are calling on you to show support for spirits at this autumn’s budget.
“The companies we represent support over 446,000 jobs, contribute £13 billion to the UK economy, and can be at the heart of supercharging your growth agenda.
“But an unfair duty regime, coupled with other unfavourable economic headwinds, have placed significant strains on our members. The businesses we represent are struggling – with some halting investment and even production in the UK, or looking elsewhere to invest; and others are being forced to reduce headcounts. For some of this country’s most iconic products, this is deeply worrying.
“Also concerning is the closure of UK pubs and other hospitality venues. To be clear – pubs cannot survive on beer alone. Tax revenues from spirits sold in the on-trade represent a third of all serves poured, but from just 15% of all the alcohol units sold. Spirits are the lifeline for these venues – supporting them not only supports the spirits industry, but also the wider hospitality sector. Beyond hospitality, the G7 high excise duty rate in the UK punishes wider manufacturing and farming sectors who count the cost of lower demand on top of the price paid by the spirits industry.
“That is why we are calling on you to announce a multi-year freeze for spirits, spanning the lifetime of this parliament; and to ensure there will be no further widening of the tax differential between spirits and other alcohol categories.
“The UK is a world-class distilling nation, and such a move to freeze excise duty would demonstrate this government’s commitment to some of the UK’s most recognisable products – whether that be gin, Scotch whisky or others – and give our members the confidence to invest and help the government’s growth agenda.
“A duty freeze should not be seen as a handout, but an investment. Our members support jobs and growth throughout the UK – you have the chance to harness this potential, let’s grasp it and freeze duty.”
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