The Chancellor has today (6 March) extended the freeze on alcohol duty until February 2025, yet the Scotch Whisky Association insists there are still “great inequities” to be addressed.
Jeremy Hunt told Parliament: “Without any action today, it [alcohol duty rate] would have been due to rise by 3%. So I’ve decided to extend the alcohol duty freeze to 2025. This benefits 38,000 pubs across the UK, and [is] on top of the £13,000 savings a typical pub will get from the 75% business rate discount I announced in the autumn. We value our hospitality industry and we are backing the great British pub”.
The news has been received mostly favourably by the industry, with many trade bodies previously worried about the impact of a potential tax rise within the sector.
Yet, while the Scotch Whisky Association noted that while it “welcomed” today’s decision as a “positive step”, it added that “great inequities” remain around alcohol taxation in the UK.
A spokesperson for the SWA said: “…[the Chancellor] has recognised that a rise in duty would be detrimental to the Scotch whisky industry and its supply chain, consumers and the wider economy at a time when the UK is still struggling to bring inflation down.”
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“While today’s announcement is a positive step, there continue to be great inequities when it comes to alcohol taxation in the UK. Scotch Whisky and spirits remain the highest taxed alcohol category in the UK. Longer term action is still needed to address the high tax burden on Scotch Whisky, which is taxed at a higher rate per unit of alcohol than wine, beer and cider.”
SWA chief executive Mark Kent added: “Despite this freeze, Scotch Whisky is still put at a disadvantage by the duty system, based on a fundamental misunderstanding of how people consume alcohol and modern drinking trends. With today’s freeze cider is still taxed four times less than a spirit like Scotch Whisky and responsible consumers who enjoy a Scotch are paying too much tax compared with a beer or cider.
“Looking ahead, we will continue to work with the UK Government to ensure that our tax system is supporting the long-term success and prosperity of our iconic homegrown sectors such as Scotch Whisky, so that Scotch and other high-quality spirits are not put at a competitive disadvantage in the UK and other markets around the world.”
Last month, research by the Scotch Whisky Association showed that predicted revenue from the alcohol tax was £3.8bn in 2020/21, yet figures show that sales from frozen duty actually added £4.1bn.
Scotch Whisky Association director of strategy and communication Graeme Littlejohn had said: “The government’s figures show that year after year the official forecasts have underestimated the boost that freezes and cuts to spirits duty can give the economy. These figures once again show the benefit of supporting the Scotch Whisky industry”.”
