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UK alcohol duty on Scotch is ‘highest amongst G7 countries’

New analysis by the Scotch Whisky Association (SWA) has revealed the significantly higher cost of alcohol duty on Scotch in the UK compared to other European and G7 nations. 

The results show Scottish consumers are paying double the tax for a dram than in a Parisian bar and duty on Scotch in the UK is now the fourth highest in Europe and the highest in the G7. Consumers in the US are paying only a fifth of the duty imposed in the UK, with duty on Scotch in Germany also only a third of the British level. The lowest level of excise on Scotch in Europe can be found in Bulgaria, which is just 15 percent of the British duty level. The lowest level of duty on Scotch in the G7 is in Japan – 17 percent of that in the UK.

The overhaul of the current duty system has seen all alcoholic drinks taxed based on their alcohol by volume (ABV), meaning that beverages with a higher alcoholic percentage are subject to higher rates, replacing the four separate taxes covering beer, cider, spirits, wine and made-wine.

The findings follow the introduction of a 10.1% hike in duty by Chancellor of the Exchequer Jeremy Hunt in August, with the SWA now calling on him to rule out a further increase in his Autumn Statement, warning another hike would exacerbate inflation, damage UK businesses, and the hospitality trade, where spirits are a third of all alcohol sales.

Gareth Davies, exchequer secretary to the HM Treasury, spoke to the drinks business at the time of the reforms, saying that “the overarching purpose of the reform is to ensure that we have consistency and a very simplified process compared to what we had before”.

The reform was first proposed by Rishi Sunak in 2021 during his time as Chancellor, and has been met with continuous backlash from industry bodies and professionals who claim the new system treats wine and spirits unfairly. The August duty increase means 73% of the cost of a bottle of Scotch in the UK is now claimed in tax, the SWA stated.

Mark Kent, Chief Executive of the Scotch Whisky Association, said: “Distillers fear another tax hike, just months after the Chancellor brought in the biggest increase in excise duty for 40 years. Raising duty again would hurt businesses and households and undermine the government’s commitment to halving inflation.

“The league table of which country has the highest level of tax on the UK’s national drink is not one any government should aspire to be near the top of. The Chancellor should rule out any further increase to excise duty this autumn and support not only distillers but the hospitality businesses he and the Prime Minister have pledged to protect.”

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