Scotch Whisky Distillers Feel Betrayed by UK Budget
In the Labour government’s budget, Chancellor Rachel Reeves announced an increase in duty on alcohol in 2025 in line with the Retail Price Index. This applies to alcohol with more than 1.2% ABV sold in the UK. The increase has stirred the Scotch Whisky industry.
Many members of the UK beverage industry have expressed anger about the decision, stating that these new measures aren’t in keeping with the government’s campaign message.
“On the campaign trail, Keir Starmer pledged to ‘back the Scotch whisky industry to the hilt’,” said Nuno Teles, managing director of Diageo GB.
“Instead, the Government has broken this promise and slammed even more duty on spirits. This betrayal will leave a bitter taste for drinkers and pubs while jeopardizing jobs and investment across Scotland.”
Scotch Whisky Distillers Feel Betrayed by UK Budget
As a result of the new duty, a bottle of scotch over £12 will be subject to the highest tax burden of any G7 country. The Scotch Whisky Association (SWA) had urged the Reeves not to be in a hurry to reverse the 10.1% duty hike that hit the spirits industry in August 2023.
“On the back of the 10.1% duty increase last year, which led to a reduction in revenue for HM Treasury, this tax hike serves no economic purpose,” said chief executive of the SWA Mark Kent.
“It will damage the Scotch Whisky industry, the Scottish economy, and undermines Labour’s commitment to promoting ‘Brand Scotland’. She has also increased the tax discrimination of spirits in the Treasury’s warped duty system, and with 70% of UK spirits produced in Scotland, that will do further damage to a key Scottish sector.
“The disastrous 10.1% duty hike last year has now been compounded. This further tax rise means the lessons have not been learned, and the Chancellor has chosen continuity with her predecessor, not change.
“We urge all MPs who support scotch whisky to vote against this duty hike and tax discrimination of Scotland’s national drink.”
In addition, many questioned about the benefits of the 1.7% reduction in draught alcohol in on-trade markets.
