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Dec 26, 2023

Scotch Whisky Association Asks UK To Halt Tax Increase

The Scotch Whisky Association is asking the U.K. government to stop a potentially devastating tariff from passing on August 1. (Photo: Ian West/PA Wire URN:19631739) The Scotch Whisky Association has

The Scotch Whisky Association is asking the U.K. government to stop a potentially devastating tariff from passing on August 1. (Photo: Ian West/PA Wire URN:19631739)

The Scotch Whisky Association has launched a campaign asking the U.K. chancellor to not implement a 10.1% duty increase proposed in March. The duty is slated to move forward on August 1, and will adversely impact scotch whisky, The Sun reported Monday.

A campaign opposed to the government’s proposed tax hike was launched in April, dubbed the “Keep The Commitment” campaign.

The latest alcohol tax was announced in March by Chancellor Jeremy Hunt as part of the spring budget for the country, which is already reeling from inflation. This tax burden will rise from 70% to 75%, making it the highest hike in 40 years. The duty rates would affect all alcoholic products made in or imported into the U.K., with the aim of increasing prices to keep up with inflation.

The tax hike is part of a new system first put in place by then-chancellor Rishi Sunak in 2021. The intiiative intends to encourage consumers to cut back on the booze by taxing drinks based on their strength.

SWA Director of Strategy Graeme Littlejohn called the duty increase as a “hammer blow for distillers and consumers.”

“At a time when inflation has only just started to creep downwards, this tax increase will continue to fuel inflation and make it more difficult for the Scotch whisky industry to invest in growth and job creation in Scotland and across the U.K. supply chain,” Littlejohn said.

In March, the SWA slammed this decision, calling it “deeply disappointing.”

“The industry continues to grapple with significant domestic headwinds, including the soaring cost of energy, intense pressure on the hospitality sector and increasing regulatory burdens like the Deposit Return Scheme. This tax hike just adds the pressures on the sector and breaks the U.K. government’s commitment to support Scotch,” said the chief executive of the SWA, Mark Kent.

The U.K.’s historic hikes in energy costs, interest rates, and cost of living have already landed a devastating blow to the hospitality industry in the country, specifically at bars and restaurants. The initiative offers tax breaks to beer and cider, yet whisky remains excluded due to its heightened ABV.

The U.S. experienced its own issues with the devastating financial impacts of tariffs during the Trump administration, which lent the bourbon world a catastrophic blow.

Despite the strong initiative from the SWA to combat the duty hike, it appears the U.K. government will be moving forward with the tax hikes Tuesday.

“HM Treasury had a choice to make,” Littlejohn said. “Rather than choosing to back an industry which the U.K. government promised to support through the tax system, the government has chosen to impose the largest duty increase in almost half a century, increasing every bottle of Scotch whisky sold in the U.K. by almost a pound and taking the tax burden on the average-priced bottle to 75%.”

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Cynthia Mersten is a writer/editor for Whiskey Raiders and has worked in the Beverage Industry for eight years. She started her career in wine and spirits distribution and sold brands like Four Roses, High West and Compass Box to a variety of bars and restaurants in the city she calls home: Los Angeles. Cynthia is a lover of all things related to wine, spirits and story and holds a BA from UCLA’s School of Theatre, Film and Television. Besides writing, her favorite pastimes are photography and watching movies with her husband.