Scottish whisky: Why ban on drinks advertising, the deposit return scheme and un-freezing of duty is a triple whammy

Although the start of a year heralds things to look forward to - and in whisky this means new distillery openings and bottlings – it can also mean change that may not be as positive.

August is scheduled to see the introduction of Scotland’s deposit return scheme (DRS), which will involve consumers being charged a 20 pence deposit when they buy a drink that comes in a single-use container made of PET plastic, steel and aluminium, or glass.

They will get their money back when they return the empty container to a return point. This has been widely criticised across the industry, from large and small business owners, due to the measures that will include the need for different labels on containers to differentiate from Scottish cans, bottles and plastics and those that are going to be sold elsewhere in the UK (and are therefore not eligible for the scheme). There are also costs to small businesses, the impact on kerbside recycling, and storage and implications of businesses who will now be handling waste. At the time of writing, the DRS looks to be going ahead, despite these concerns, with many issues still to be resolved.

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March is the closing date for the consultation on the proposed alcohol advertising and promotion restrictions, which, if enacted in full, would see huge changes to the drinks industry in Scotland. Put simply, these proposals could see a limit to in-store advertising, prohibit sponsorship, restrict branding, remove promotion and advertising of alcohol in public spaces, and restrict TV, print, radio and online advertising. This could mean huge losses for visitor centres if branded items are taken away, not to mention the impact on cultural events that are sponsored by big drinks brands.

The deposit return scheme is due to start in August

Finally, in what could be a triple whammy for the industry, the freeze to UK alcohol duty rates will end on August 1 – two weeks before the launch of the DRS. The freeze was announced by former chancellor Kwasi Kwarteng in September last year, but his successor Jeremy Hunt scrapped this, then U-turned, keeping the freeze until the summer. It was thought to save the industry around £600 million in tax.

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