Scotch whisky distillers warn high tax burden is stifling investment and jobs
Three quarters of Scotch whisky producers say they will cut or shift investment away from the UK due to mounting tax pressures, new industry research shows.
Three in four Scotch whisky companies expect to defer investment or invest outside the UK as a result of the current tax burden, according to new research by the Scotch Whisky Association (SWA).
The findings, gathered between February and June 2025, reveal widespread concern over the impact of alcohol duty, with more than two thirds of the price of an average bottle of Scotch collected in tax.
Following a 10.1% duty increase in March 2023 and a further 3.65% rise in the October 2024 Budget, 87% of SWA member respondents said they fear duty will rise again in this autumn’s Budget.
Any further increases could have a knock-on effect on recruitment and investment, according to the research. A quarter of distillers now expect to reduce headcount, citing economic headwinds and the current level of alcohol duty. The Scotch whisky industry currently supports 66,000 jobs across the UK.
Concerns grow over broader economic impact
Beyond direct job losses, the SWA warns of wider risks across the supply chain as distillers look to scale back production. Global tariffs continue to weigh on exports, adding further pressure on businesses.
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At the start of 2025, more than half of companies surveyed expected government policy measures — such as Extended Producer Responsibility (EPR) fees, National Insurance Contribution (NIC) increases, and tariffs — to raise operational costs by 10%. That figure has now risen to 40% of respondents anticipating cost increases of over 20%.
Despite the rising levels of duty, data from HMRC shows that spirits duty receipts have failed to grow as forecasted.
Mark Kent, Chief Executive of the Scotch Whisky Association, said: “The Scotch whisky industry has a long track record of investment and growth that has benefitted communities across Scotland and the supply chain across the UK. It is also an optimistic and confident sector that believes in creating future growth.
“However, the positivity of the industry is being severely tested by the relentless impact of domestic policies and global circumstances.
“The industry is facing the significant challenge of US tariffs and increasing domestic pressures at a time it would otherwise be looking to support the Prime Minister’s growth mission. This high tax burden is not delivering the expected additional revenue for the Government, but it is costing jobs and investment.
“At a time when the country needs economic growth, we cannot fail to back one of the UK’s longstanding successes.”
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