Spirits industry applauds end of UK ‘super tax’

Members of the UK’s spirits industry have welcomed the news that a “debilitating” automatic tax escalator for alcohol will be scrapped.

The SWA, Diageo and the WSTA are among some of the first members of the drinks industry to welcome the end of the UK’s automatic tax escalator for alcohol

Earlier today, Chancellor of the Exchequer George Osborne announced that the UK’s automatic tax escalator for alcohol – which has seen duties rise 2% above the rate of inflation since the measure was introduced in 2008 – would not be implemented in the next financial year.

As part of his 2014 Budget statement, he also revealed that duty on all spirits would be frozen, highlighting the “success story” of Scotch whisky.

Reacting to the news, David Frost, CEO of the Scotch Whisky Association (SWA), said: “We are delighted that the Chancellor and the Chief Secretary to the Treasury listened to our case for scrapping the unfair alcohol duty escalator and freezing whisky duty. It is a move that supports hard-pressed consumers, a major manufacturing and export industry and the wider hospitality sector.

“This fairer tax treatment in the UK, the third biggest market for Scotch Whisky, also sends the right signal on excise policy to the governments of the 200 countries to which we export.  So its effects will be felt around the world.”

The Scotch Whisky Association (SWA), Wine and Spirits Trade Association (WSTA) and the Taxpayers’ Alliance launched the Call Time on Duty campaign, urging the Chancellor to end the automatic alcohol tax escalator and freeze duty.

Research commissioned by campaigners claims that this measure would boost public finances by £230 million and would create 6,000 new jobs.

Success at last

“It is great news that our Call Time on Duty campaign has been successful,” said Miles Beale, CEO of the WSTA.

“This will be widely welcomed by consumers and businesses across the UK. The Chancellor’s decision to scrap the alcohol duty escalator a year early and freeze alcohol duty for spirits is fantastic news and will be widely welcomed by consumers and businesses.”

Beale added that although the organisation applauds the Chancellor’s announcement, he would like to have seen a “complete freeze on wine duty” too.

Meanwhile, UK drinks industry giant Diageo has called the Budget statement a “huge boost to one of Britain’s most successful industries”.

Andrew Cowan, country director for Diageo Great Britain, said: “From Scotch whisky to London Gin, British spirits are admired and enjoyed around the world.

“In freeing the industry from an debilitating tax policy the Government has given a show of support for these quality products.”