A coalition of UK spirits producers has urged the government to relieve duty pressures on small, independent brands.
The British Distillers Alliance is calling for a reduction of the duty rate for small spirits producers, similar to that received by small brewers.
The spirits sector’s rapid expansion over recent years meant there was “now a very good case” to make such a move, said BDA founder Alan Powell.
“The paradox is that the high rate of spirits duty in the UK, and the time [in which] it must be paid, acts as a barrier to domestic growth and, moreover, there is no reduction of the duty rate for smaller spirits producers, as there is for small brewers.”
Small brewer relief legislation currently allows brewers who make under 5,000 hectolitres of beer a discount of 50%, with smaller reductions for producers of up to 60,000 hectolitres.
“Our campaign has commenced with BDA members contacting MPs and other influencers to ask for support of our case,” said Powell. “We will then be seeking meetings with all relevant ministers to make the case, especially in comparison with the lop-sided and unfair alcohol duty structure. We are also seeking advice from senior expert EU lawyers. All we are asking is that the playing field is made more level.”
He also highlighted the prevalence of products that are diluted after duty is paid, such as numerous ‘British’ budget wines and RTDs.
He said these products, which can be created at higher volumes with a lower duty burden, created unfair competition for genuine spirits producers - although it was announced in the October budget that post-duty point dilution will become illegal from 2020.
“Spirits duty is linear, so there is no possibility of distillers ever being able to gain a duty advantage by such avoidance,” he added. “Spirits producers must compete in the same UK drinks market as diluted alcohol products, many of which appear to be spirits, or spirits-based.”
Founded two years ago, the BDA’s roster of members so far includes the likes of the Cotswolds Distillery, East London Liquor Company, and Silent Pool Distillers.
Spirits duty, along with beer duty, was given a freeze in the recent budget - it currently stands at £28.74 per litre of pure alcohol. Only wine duty was increased in line with RPI.