UK Scotch market shrinks by 3%

13th March, 2014 by Lauren Eads

The UK Scotch whisky market shrunk by 3% last year strengthening calls by the Scotch Whisky Association (SWA) to scrap an “unfair” super tax on spirits.

ScotchFigures published yesterday revealed that the number of 70cl bottles of Scotch whisky released for sale in the UK fell to 87.5 million in 2013, down from 90m the previous year.

The Scotch Whisky Association (SWA) has said this is further evidence that the Alcohol Duty Escalator (ADE), introduced in 2008, is damaging the UK whisky industry which it said is “vital to the economy” supporting some 35,000 jobs.

The ADE means that duty has automatically increased by 2% above the rate of inflation each year since 2008 with tax on Scotch whisky rising by 44% over five years and leading to 79% of the average priced bottle of Scotch to now be made up of tax and VAT.

The SWA, together with the Tax Payers’ Alliance and the Wine and Spirits Trade Association, launched it “Call Time on Duty” campaign earlier this year in a bid to convince the UK Government to scrap the ADE on wine and spirits and freeze duty in this year’s budget which will be set on 19 March.

Since the escalator was introduced, the UK market for Scotch whisky has declined by more than 15% in volume from 103m bottles in 2008 to today’s 87.5m.

David Frost, chief executive of the Scotch Whisky Association, said: “It’s obviously disappointing to see this decline in Scotch Whisky volumes in our domestic market. In next week’s Budget the Chancellor has the perfect opportunity to support a vital Scottish industry. He should scrap the unfair alcohol duty escalator and freeze duty this year. This move would also benefit consumers and public finances.

“Since the introduction of the escalator in 2008, the UK market for Scotch Whisky has shrunk by more than 15%. Fairer tax treatment would help address this decline in the UK. It would send the right message to overseas governments in markets where imported products, such as Scotch Whisky, face discrimination. It would also reflect and support the UK’s drive for export-led growth.”

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