UK: Scotch Whisky Association urges for a multi-year freeze on spirits duty

The Scotch Whisky Association (SWA) is urging the UK Chancellor to deliver a multi-year freeze on spirits duty in the upcoming Autumn Budget. The trade body highlighted mounting regulatory costs, unstable global trading conditions, and the negative impact of recent tax hikes on both Treasury revenue and the hospitality sector, The Whiskey Wash reported on October 20.

Duty increases over the past two years have increased the tax burden on an average-priced bottle of scotch, with a minimum of £12 of every bottle sold in the UK now claimed by tax.

Despite these hikes, the SWA reports that excise duty from spirits has flatlined and fallen £600 million short of Treasury forecasts over the past two years.

The trade body also emphasized the importance of spirits to the UK’s on-trade. Spirits account for 15% of alcohol servings in pubs, bars, and restaurants but generate 38% of their alcohol profits.

This call to protect a vital income stream for hospitality businesses follows recent UKHospitality research showing nearly 84,000 jobs have been lost in the sector since the last budget.

The industry also faces external pressures, including 10% U.S. tariffs that cost the sector nearly £4 million each week. The combination of domestic duty and tariffs has contributed to more than 1,000 job losses in the past year alone.

Mark Kent, chief executive of the Scotch Whisky Association, commented on the industry’s request.

“Scotch Whisky is one of the UK’s greatest global success stories, but the industry is at a crossroads as it faces significant global pressure now and its foundations here at home in the UK need underpinned,” Kent said.

“We are calling on the Chancellor to back Scotch with a multi-year duty freeze. A freeze on spirits duty will not only support Scotch Whisky producers through a turbulent global trading environment but also provide a much-needed boost to hospitality and Treasury revenues.”

He added: “The Chancellor should step away from damaging counterproductive duty rises and show that the government backs Scotch.”

The SWA’s campaign follows a 10.1% increase in spirits duty implemented in August 2023, which was the largest single increase in more than 40 years.