Craft distillers have warned that UK booze taxes are stifling growth as they join a campaign to cut duty on alcohol.
Distillers from across the UK have called on Chancellor of the Exchequer George Osborne to cut the “punitive” rate of duty on alcohol to deliver a boost to the burgeoning industry.
The firms, including Kilchoman Distillery on Islay, have backed the ‘Drop the Duty!’ campaign which is pressuring the UK for a 2% cut in tax on spirits at the next UK Budget in March 2015.
The campaigners, led by the Scotch Whisky Association (SWA), Wine and Spirit Trade Association (WSTA) estimates that a 2% cut in duty would provide an additional £1.5billion to the Treasury through increased investment across the industry, greater income from corporation tax and VAT, and from the benefits of jobs created in pubs, bars, restaurants, shops and the wider supply chain.
Dom Roskrow, director of the Craft Distillers’ Alliance (CDA), said: “The UK spirits industry has grown rapidly over the last 18 months largely due to the successes of craft distillers.
“Up and down the country there are small distilleries creating jobs, boosting tourism and raising tax revenue in towns and cities. The government should be doing all it can to develop and encourage growth in this industry rather than focusing on punitive tax measures.”
Anthony Wills, founder and manager director of Kilchoman, added: “The whisky industry welcomed last year’s duty freeze, but with tax still accounting for nearly 80% of an average bottle’s price more action is needed.
“The UK is vital for many new and small distillers, both as a key market but also a base to grow exports in the future. A 2% duty cut would be a significant boost to investment in the sector.”
SWA estimate that UK consumers currently pay £10.06 in tax on an average bottle of whisky. The group added that 84%of Brits believe that this level of tax on Scotch and other spirits is unfair.
Today, the UK’s smaller producers outlined how these punitive tax rates are stifling their growth ambitions. Commenting on the campaign,
David Frost, SWA chief executive, said: “Small distillers and British consumers are being unfairly penalised. Not only is the spirits tax rate the fourth highest in the European Union, it is double the rate applied in France and two and a half times higher than in Germany.
“We are calling on the Chancellor to build on last year’s duty freeze to support an important, home-grown industry.”