Scottish whisky industry says UK Government broke commitment to ‘back Scotch producers to the hilt’

The Scotch Whisky Association (SWA) has said the chancellor’s decision to further increase duty on Scotch whisky has broken the Prime Minister’s commitment to ‘back Scotch producers to the hilt.’

In her first Budget, chancellor Rachel Reeves announced an RPI inflation increase to alcohol duty, but cut duty on draught products in the on-trade by 1.7%.

Scotch whisky and other spirits are excluded from this tax relief.

The SWA had called on the new chancellor to take the opportunity to reverse the 10.1% increase which was introduced in August 2023.

Instead, the industry claims the impact has been compounded by further increasing the tax burden on the sector, which is already the highest in the G7.

The SWA says spirit revenue fell by hundreds of millions of pounds as a result of the 10.1% duty increase last year. The industry has now warned that this further tax hike will not deliver the revenue ministers had promised but will hurt businesses, the hospitality sector and hard-pressed consumers.

SWA chief executive Mark Kent said: “This duty increase on Scotch whisky is a hammer blow, runs counter to the Prime Minister’s commitment to ‘back Scotch producers to the hilt’ and increases the tax discrimination of Scotland’s national drink.

“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.

“It will damage the Scotch whisky industry, the Scottish economy, and undermines Labour’s commitment to promote ‘Brand Scotland’.

“[Rachel Reeves] 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.”

The UK Government has been contacted for comment.