Scotch Whisky calls for 2% excise duty cut

The Scotch Whisky Association (SWA) has called for a further 2% cut in excise duty in next month’s budget, stressing the industry’s importance to the Scottish and UK economies.

“Scotch Whisky is a star performer for the UK economy in overseas markets and without its success Britain would have a substantially larger trade deficit,” said the SWA.

The SWA said Scotch is the biggest net contributor to UK trade in goods, with exports worth almost £4 billion, while imports such as packaging for products and casks for maturing the spirit total only £200 million.

“The Scotch industry’s trade balance is therefore £3.8 billion,” said the SWA. “Without the success of Scotch, the UK’s trade deficit of almost £35 billion would be 11% larger.”

These figures are among key findings of a new study released by the SWA on the “Economic Impact of Scotch Whisky Production in the UK.”

The SWA said other findings include:

  • Value added to the economy is up 1.6% to just over £5 billion
  • The industry invests £1.7 billion a year in its supply chain, almost all in the UK
  • Scotch Whisky supports salaries worth £1.4 billion to UK workers
  • The industry plays an important role in rural communities where it employs 7,000 people

The Scotch Whisky industry is expanding fast, with nine new distilleries opening in the last two years and up to a further 40 planned across Scotland.

“Last year’s 2% cut and the spirits duty freeze and scrapping of the alcohol escalator in 2014 gave a boost to confidence in the industry, helping to support the conditions for investment,” said the SWA.

“Despite the improvement in the last couple of years, tax, including excise and VAT, on an average priced bottle of whisky stands at an onerous 76%.

“Last year’s spirits duty cut actually helped boost government tax receipts on spirits by £96 million between April and December, compared to the same period in 2014.

“There is every reason to think that a further reduction would benefit UK revenues once again, as well as the Scotch Whisky industry and consumers.”

David Frost, Scotch Whisky Association chief executive, said: “These figures re-emphasise how significant the Scotch Whisky industry is to the Scottish and wider UK economy, adding more than £5 billion of value and supporting around 40,000 jobs.

“But it may surprise some people that Scotch Whisky is now the number one contributor to the UK’s balance of trade in goods and that the trade deficit would be 11% higher without whisky exports.

“Given the scale and impact of the Scotch Whisky industry, we believe the government should re-double its efforts to support distillers.

“At home, in the short term, a further 2% duty cut in next month’s Budget would be a major boost, supporting small businesses that rely on the home market and further investment in the sector.”