Thursday, 19 October 2017

Call to end Scotch supertax as whisky sales tumble

SCOTCH-1

SCOTCH whisky sales have fallen by one million bottles in the UK in the wake of the spirits tax.

Official HM Revenue & Customs figures show 36.7 million bottles were sold in the world’s fourth biggest market for Scotch in the first six months of 2017 – down from 37.7 million in the same period last year.

The Scottish Whisky Association (SWA) blamed the 2.6 per cent fall on the hike in excise duty announced in the March budget which added around 36p to the average bottle of spirits.

It comes as it emerged the prices of rare Scotch whisky have been soaring in recent years while the industry has been expanding at historic levels.

It was feared the March price rise would have the biggest impact on start-up distilleries, including the new wave of Scottish gin makers, as they rely most heavily on the domestic market to become established.

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Alcohol excise duty had been cut or frozen for three years, but rose by 3.9 per cent from March.

The £5 billion whisky industry said the rise was particularly galling in light of Theresa May referring to whisky as “a truly great Scottish and British industry” at the Scottish Tory conference in March.

The SWA said that tax now makes up an “astonishing” 80 per cent of the cost of a bottle of Scotch. Of an average bottle sold at £12.77, more than £10 goes straight to the Treasury, it said.

SWA figures show that on an average priced bottle of Scotch at £12.77, there will be excise duty of £8.05, VAT of £2.13, making a total tax £10.18, while the whisky is £2.59.

Now the industry is urging the Chancellor to cut excise duty on spirits to “protect the UK’s leading food and drink export” which supports 40,000 jobs.

The SWA has launched a Drop The Dram Duty campaign calling for fairer tax treatment to spirits in his November budget.

Karen Betts, Scotch Whisky Association chief executive, said: “Philip Hammond’s damaging 3.9% spirits duty hike has hit UK demand for Scotch and seen less money going to the Treasury.

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