Whisky chiefs have launched a fresh attack on the UK tax regime after new figures revealed a sales slump in the UK.
Figures published today reveal that the number of 70cl bottles of Scotch whisky released for sale in the UK fell to 87.5million in 2013 – down from 90million the previous year.
The Scotch Whisky Association (SWA) said this is further evidence that the alcohol duty escalator – introduced in 2008 – is damaging the vital industry.
The drink supports 35,000 jobs and is vital to many rural and urban communities – particularly in Moray and the Highlands.
But the escalator means that duty has increased by 2% above the rate of inflation each year since 2008.
Tax on Scotch whisky has risen by 44% over five years and some 79% of the average price of a bottle of Scotch is now made up of tax and VAT.
Many of Scotland’s great malts are breaking the £40 barrier as a result.
The SWA is now asking Chancellor George Osborne to “Call Time on Duty” in next week’s Budget. Their fight is being backed by the leader of the Conservatives in Scotland, Ruth Davidson.
David Frost, SWA chief executive, said: “It’s obviously disappointing to see this decline in Scotch whisky volumes in our domestic market.
“In next week’s Budget, the chancellor has the perfect opportunity to support a vital Scottish industry.
“He should scrap the unfair alcohol duty escalator and freeze duty this year. This move would also benefit consumers and public finances.
“Since the introduction of the escalator in 2008, the UK market for Scotch whisky has shrunk by more than 15%.
“Fairer tax treatment would help address this decline in the UK.
“It would send the right message to overseas governments in markets where imported products, such as Scotch whisky, face discrimination.
“It would also reflect and support the UK’s drive for export-led growth.”
Since the escalator was introduced, the UK market for Scotch whisky has declined more than 15% in volume from 103million bottles in 2008. Some 16million bottles of Scotch have been lost from the domestic market in the last five years.
Ms Davidson said: “These figures illustrate the need for action to help this great Scottish success story.
“If we keep the escalator in place and allow tax to keep rising, it will push tax and duty on a bottle of Scotch above 80%.
“I’ve repeatedly put our case to the chancellor on this and I’ll continue to push for changes in next week’s Budget to make it happen.
“A tax freeze would give the Scotch whisky industry a vital boost so it can build further on its success.”