Scotch whisky makers are planning to defer investment – or invest outside the UK – due to the impact of successive alcohol duty rises, according to new survey data from the Scotch Whisky Association.
Following a 10.1% rise in duty in August 2023, and a further 3.7% increase in February of this year, three-quarters of scotch whisky makers said they were planning to rein in UK investment or spend overseas instead.
The sector remains downbeat on the possibility of duty being frozen in this autumn’s budget. Some 87% of respondents to the SWA survey said they expected the rate of excise duty on alcohol to go up again.
One in four, meanwhile, said they expected to make job cuts amid broader economic headwinds.
“The Scotch whisky industry has a long track record of investment and growth that has benefited communities across Scotland and the supply chain across the UK,” said SWA CEO Mark Kent. “It is also an optimistic and confident sector that believes in creating future growth.
“However, the positivity of the industry is being severely tested by the relentless impact of domestic policies and global circumstances.
“The industry is facing the significant challenge of US tariffs and increasing domestic pressures at a time it would otherwise be looking to support the prime minister’s growth mission. This high tax burden is not delivering the expected additional revenue for the government, but it is costing jobs and investment.
“At a time when the country needs economic growth, we cannot fail to back one of the UK’s long-standing successes.”
The value of scotch whisky exports dropped by 3.7% to £5.4bn in 2024, according to SWA figures.
“Inflationary impacts on input costs such as cereals, energy and shipping, and the increased tax and regulatory costs, including the substantial cost of EPR” had contributed to a “challenging year” for scotch in 2024, Kent said at the time.
In January, Glenglassaugh Distillery – which is owned by US spirits company Brown-Forman – announced an indefinite pause to production. The move resulted in an unconfirmed number of redundancies.
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