Sales of Scotch whisky in the UK have fallen by 1m bottles after the tax on spirits was increased in Chancellor Philip Hammond’s March Budget, says the Scotch Whisky Association (SWA).
According to HM Revenue & Customs (HMRC) figures, 36.7m bottles of Scotch were released for sale in the UK in the first six months of 2017, compared to 37.7m bottles in the same period of 2016.
The 2.6% fall, which followed the 3.9% spirits duty increase announced in the spring Budget, has led the SWA to launch its Drop The Dram Duty campaign.
The campaign calls on the Chancellor to ‘give fairer tax treatment to spirits’ in this November’s Budget, based on the fact that tax now makes up 80% of the cost of an average bottle of Scotch – more than £10 out of £12.77.
HMRC figures say that spirits revenue fell by more than 7% in the first quarter of the 2017/18 financial year, reaching £697m compared to £751m in April to June 2016.
The SWA said a 2% duty cut in 2015 had led to a 4% rise in spirits revenue, giving an additional £124m to the Treasury, while a duty freeze in 2016 had led to a revenue increase of more than 7%, or £229m.
‘Philip Hammond’s damaging 3.9% spirits duty hike has hit UK demand for Scotch and seen less money going to the Treasury,’ said Karen Betts, SWA chief executive.
‘The Chancellor should use his November Budget to Drop The Dram Duty and boost a great British success story.’
The SWA said the rate of excise duty per litre of Scotch whisky increased by 47% between 2007 and 2017, from £19.56 to £28.74.
Betts added: ‘Cutting tax would send a strong signal that the Government believes in a world-famous UK manufacturing industry which supports 40,000 jobs and plays a key role in Scotland’s economy.’