Whisky barrels

The Scotch Whisky Association (SWA) has called on Chancellor George Osborne to cut spirits duty in order to turn around falling whisky sales volumes.

The number of 70cl bottles of Scotch release for sale in the UK last year was 83.3 million – a fall of 4.8% on the previous year, and down 9.5% from the 92 million released in 2009. The SWA claimed this was evidence that the level of tax, which constitutes 78% of the price of an average bottle of Scotch, was damaging the industry.

Calling for a 2% cut in duty in next week’s budget, the SWA pointed to research it conducted with Censuswide last year that found two thirds of people were unaware of the level of tax on spirits, and when told, 84% described it as unfair. It also highlighted the while the UK accounts for a quarter of all spirits excise duty paid in the EU, the equivalent figures for France, Germany and Spain are 15%, 14% and 5% respectively.

The alcohol duty escalator, introduced in 2008 by then Chancellor Alistair Darling, was abolished by Osborne for beer in 2013, and wine and spirits last year. Although duty on spirits was frozen last year, the category has enjoyed a tax cut just three times in the last century.

“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 SWA chief executive David Frost. “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.”