The Scotch Whisky Association (SWA) has condemned the Chancellor’s decision to increase duty on Scotch Whisky, arguing it directly contradicts the Prime Minister’s promise to “back Scotch producers to the hilt.”
In her first Budget, Chancellor Rachel Reeves has introduced an inflation-based rise to alcohol duty, while reducing duty on draught products sold in pubs and bars by 1.7%. However, this relief does not extend to Scotch Whisky or other spirits and means that the minimum tax on a bottle of Scotch Whisky will surpass £12 for the first time.
This latest hike intensifies what is already the heaviest tax burden on Scotch Whisky among G7 nations with the industry warning that the UK’s spirits industry as a whole will suffer as a result of this increase.
“This duty increase on Scotch Whisky is a hammer blow,” said Mark Kent, Chief Executive of the SWA. “It runs counter to the Prime Minister’s commitment to ‘back Scotch producers to the hilt’ and increases the tax discrimination of Scotland’s national drink. This tax hike serves no economic purpose. It will damage the Scotch Whisky industry, the Scottish economy, and undermines Labour’s commitment to promote ‘Brand Scotland’. She has also increased the tax discrimination of spirits in the Treasury’s warped duty system, and with 70% of UK spirits produced in Scotland, that will do further damage to a key Scottish sector.”
Nuno Teles, Managing Director at Diageo GB, echoed the SWA’s frustration, stating, “On the campaign trail, Keir Starmer pledged to ‘back the Scotch whisky industry to the hilt’. Instead, the Government has broken this promise and slammed even more duty on spirits. This betrayal will leave a bitter taste for drinkers and pubs while jeopardising jobs and investment across Scotland.”
The SWA had previously urged the Chancellor to address the fallout from a 10.1% duty hike introduced in August 2023. This prior increase led to a significant decline in spirit revenue for the Treasury, with the SWA estimating the loss at £298 million with fears that this new tax rise will worsen these economic consequences, impacting businesses, the hospitality sector, and consumers already facing financial strain.
“The disastrous 10.1% duty hike last year has now been compounded,” Kent said. “This further tax rise means the lessons have not been learned, and the Chancellor has chosen continuity with her predecessor, not change. We urge all MPs who support Scotch Whisky to vote against this duty hike and tax discrimination of Scotland’s national drink.”