Whisky industry urges duty freeze as tax tops £12 a bottle
The Scotch Whisky Association has called for a multi-year freeze on spirits duty in next month’s Autumn Budget as rising costs and a faltering tax pile pressure on producers and the wider hospitality sector.
The Scotch Whisky Association (SWA) is urging the Chancellor to deliver a multi-year freeze on spirits duty in November’s Autumn Budget, as the sector faces what it describes as “significant global pressure” and growing domestic costs.
According to the SWA, duty rises of 14% over the past two years have pushed the tax burden on Scotch to more than £12 per bottle for the first time, with £7 in every £10 bottle going to the Treasury. Despite this, excise receipts from spirits have stalled and are £700 million below forecast.
SWA chief executive Mark Kent said: “Scotch Whisky is one of the UK’s greatest global success stories, but the industry is at a crossroads as it faces significant global pressure now and its foundations here at home in the UK need underpinned.
“We are calling on the Chancellor to back Scotch with a multi-year duty freeze. A freeze on spirits duty will not only support Scotch Whisky producers through a turbulent global trading environment but also provide a much-needed boost to hospitality and Treasury revenues. The Chancellor should step away from damaging counterproductive duty rises and show that the government backs Scotch.”
Hospitality sector joins call for duty action
UKHospitality has joined forces with the SWA to warn that rising costs and job losses are threatening both industries, as reported by the drinks business. Spirits currently face the highest duty rates of all alcohol categories in the UK and the heaviest tax burden in the G7.
The SWA reports that 1,000 jobs have been lost across the industry over the past year, while UKHospitality figures reveal that nearly 84,000 hospitality jobs have disappeared since the last Budget.
Allen Simpson, chief executive of UKHospitality, said: “As we head towards the Budget, it’s clear that businesses across the supply chain need urgent support to survive. We’ve seen swathes of job losses across the hospitality sector, which is the backbone of the UK’s economy and wider society.
“That’s why we’re supporting the Scotch Whisky industry’s call for a long-term duty freeze, which would help to alleviate some of the pressures facing the hospitality supply chain.”
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Duty rise weighs on pubs and bars
According to the SWA, spirits account for only 15% of alcohol serves in the on-trade but generate 38% of alcohol profits for pubs, bars and restaurants. Rising duty threatens to erode this vital revenue stream for operators already under strain.
Recent data from UKHospitality shows nearly half of all hospitality job losses over the past year have been concentrated in this part of the sector.
The Autumn Budget will be “a critical moment” for Britain’s hospitality industry, according to Alison Jordan, CEO of The Oxford Partnership. She said stability on business rates and taxation could “be the difference between steady progress and another wave of closures”.
Global headwinds add further strain
The industry’s challenges extend beyond UK borders. The SWA reports that 10% US tariffs are costing the Scotch sector nearly £4 million each week. Combined with domestic duty increases, this has deepened pressure on distillers, particularly smaller producers.
Scotch Whisky supports 41,000 jobs in Scotland alone, contributes more than £7 billion in gross value added each year, and accounts for 22% of the UK’s total food and drink exports. More than 2.7 million tourists visit Scotch Whisky visitor centres annually, supporting rural economies and hospitality businesses.
Industry braces for November Budget
The sector has called on the government to back its words of support with action in the Autumn Budget, set for 26 November.
Kent added: “An excise duty freeze is in the Chancellor’s gift to deliver, which would in turn give respite for businesses, and deliver Treasury revenue, which the government’s own figures show has flatlined since the first duty rise was confirmed.”
He concluded that a multi-year freeze would provide stability for both Scotch producers and the hospitality sector, which remains a crucial partner for the industry.
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