Independent distillers join calls for UK duty cut

A number of small distilleries in Britain have pledged their support for the Drop the Duty campaign, lobbying the government for a 2% cut in alcohol tax.

Independent UK distilleries have joined calls for a 2% reduction in alcohol duty

The campaign was launched in a collaborative effort between the Scotch Whisky Association (SWA), Wine and Spirit Trade Association (WSTA) and the Tax Payers’ Alliance in November last year.

These trade bodies are lobbying UK Chancellor George Osborne to cut alcohol duty during the next Budget, claiming that duty and VAT account for 80% of the price of a bottle of whisky.

Supporters of the campaign claim such a measure would create an extra £1.5 billion for public finances through increased investment across the industry, more jobs and corporation tax.

The SWA has now announced that the UK’s Craft Distillers’ Alliance has joined the team of campaign supports, arguing current taxation policies stifle their growth ambitions.

“The UK spirits industry has grown rapidly over the last 18 months largely due to the successes of craft distillers,” said Dom Roskrow, director of the CDA. “Up and down the country there are small distilleries creating jobs, boosting tourism and raising tax revenue in towns and cities.

Support from craft sector

“The government should be doing all it can to develop and encourage growth in this industry rather than focusing on punitive tax measures.”

Ian Hart, founder of Sacred Spirits Company in London, added that the UK’s burgeoning craft spirits industry is “held back by the current exorbitant duty regime”.

“We are characterised by small balance sheets and cannot finance the duty cashflows required under the present scheme. Growth is severely hindered, while craft distilleries in other countries have an easier time of it,” he added.

“We can barely get started, let alone finance exports due to UK duty outflows.”

Support for the Drop the Duty campaign has also been pledged by Wales’s Penderyn Distillery and Islay’s Kilchoman Distillery

In December last year, a survey by Censuswide revealed that 84% of British people believe the rate of tax on Scotch whisky is “unfair”.

George Osborne received praise from the drinks industry last March when he scrapped the automatic tax escalator and froze duty on spirits.

Commenting on the recent growth in support for Drop the Duty, David Frost, chief executive of the SWA, said: “Small distillers and British consumers are being unfairly penalised.

“Not only is the spirits tax rate the fourth highest in the European Union, it is double the rate applied in France and two and a half times higher than in Germany.

“We are calling on the Chancellor to build on last year’s duty freeze to support an important, home-grown industry.”