Autumn Statement: Whisky industry ‘raising a dram to the Chancellor’ after freeze in alcohol duty

The Scotch Whisky Association said the move provides ‘some much-needed stability’

Scotland’s whisky industry has welcomed a freeze in alcohol duty, insisting it provides “some much-needed certainty and stability” for distillers.

The Scotch Whisky Association (SWA) said the move by Chancellor Jeremy Hunt would boost growth and increase revenues.

However, it warned whisky continues to be taxed at a higher rate per unit of alcohol than wine, beer and cider.

Chancellor Jeremy Hunt

Delivering his Autumn Statement, Mr Hunt told MPs he had decided to freeze all alcohol duty until August 1 next year, adding: “That means no increase in duty on beer, cider, wine or spirits.”

The SWA previously criticised the Chancellor for raising duty on whisky by 10.1 per cent as part of the Spring Budget. It said the latest move showed the Treasury had listened to the sector’s calls to support the industry, its supply chain and consumers.

The duty rate on spirits remains at the August level of £31.64 per litre of pure alcohol, meaning that of the £15.63 average price of a bottle of Scotch whisky, £11.40 is collected in taxation through duty and VAT – a tax rate of 73 per cent.

Mark Kent, chief executive of the SWA, said: “The industry is raising a dram to the Chancellor’s decision to support Scotch whisky producers by returning to the duty freezes that have supported the industry, incentivised investment, and boosted Treasury revenue.

"With cost pressures hurting distillers large and small, the Treasury has provided some much-needed certainty and stability for the year ahead that will allow us get back to doing what we do best – making a world-class spirit, with a global reputation, which creates jobs and boosts growth here at home.

“Under the current duty system, Scotch whisky is still put at a disadvantage, based on a fundamental misunderstanding of how people consume alcohol and modern drinking trends.

"We want to continue the discussion with government about how the tax system can more closely reflect the number of units in a typical drink, rather than the strength of the finished product. Despite today’s duty freeze, cider is still taxed four times less than a spirit like Scotch whisky – this is not fair and cannot be justified.”

Nuno Teles, managing director of drinks giant Diageo GB, said: “Today we raise a glass to the Chancellor and the Prime Minister, who have listened to the industry’s plea for support and decided to back our home-grown sector, that employs so many people across the UK.

"Drinkers and pub-goers across the country now have even more reason to celebrate this festive season. Cheers Chancellor.”

Scottish Conservative leader Douglas Ross said he was “delighted that the Chancellor has delivered for Scotland's iconic whisky industry”.

Liz Cameron, chief executive of the Scottish Chambers of Commerce, said the freeze would help firms “expand and invest and contribute even more to the economy”.