UK urged to stand up for £5bn Scotch industry

The Scotch Whisky Association (SWA) called for a 2% spirits excise duty cut in the next UK Budget as it revealed new research that showed Scotch creates £5 billion annually for the UK economy, supports more than 40,000 jobs and is the largest net contributor to the UK’s balance of trade in goods.

The research called “The Economic Impact of Scotch Whisky Production in the UK” revealed that without Scotch, the UK’s trade deficit in goods of £115 billion would be 3% larger.

It showed the industry pays almost £1.3 billion in salaries in Scotland.

The SWA said the UK Government’s support of the industry in recent years had led to a boost in revenue for the Treasury and supported a wave of new distillery openings — 14 in the past three years.

“But tax remains too high at 77% of the price of an average bottle of Scotch and the SWA is calling for fairer treatment,” said the trade body.

“Today’s research explains that exports of Scotch Whisky are worth around £4 billion each year, while imports in the supply chain, such as packaging for products and casks for maturing spirit, total only £200 million.

“The Scotch industry’s trade balance is therefore £3.7 billion.”

The SWA said that in the 12 months to the end of October, the UK Treasury secured around an additional £100 million from spirits duty — including the tax consumers pay on a bottle of Scotch.

During that period, spirits duties totalled £3.2 billion, up £99 million on the previous year.

Key findings from the new research include:

  • Scotch Whisky adds £4.9 billion to the UK economy
  • 40,200 jobs are supported by the industry across the UK. This includes more than 10,500 people directly employed in Scotland. Almost £1.3 billion is paid in salaries in Scotland
  • Scotch is a significant contributor to rural employment, supporting often fragile local economies. The industry supports 7,000 rural jobs.
  • The Scotch industry is expanding at historic levels. As well as the 14 new distilleries opened since 2013, existing sites have been expanded. Up to a further 40 new distilleries are planned across Scotland, with seven expected to open this year alone.

But the SWA said the uncertainty created by Brexit means that the industry needs more reassurance that it will receive fair treatment from government.

Julie Hesketh-Laird, Scotch Whisky Association acting chief executive, said: “Scotch Whisky is one of the UK’s most strategically important industries …

“But we are calling on the government to ‘Stand up for Scotch’ by addressing the high and unfair level of taxation distillers face in their home market.

“The current tax of 77% on an average priced bottle of Scotch is a burden on consumers and the industry.

“And the Government’s own figures indicate that fairer tax treatment leads to increased revenue for the public purse.

“We are calling on the UK Government to cut excise by 2% in next month’s Budget, supporting a great Scottish and British industry at a time of uncertainty, giving us a stronger domestic platform from which to invest and grow to make a success of Brexit.”