Scotch whisky sales plummet after Government hikes tax on spirits

The Treasury takes home 80 per cent of the cost of a bottle of Scotch

Laura Paterson
Thursday 12 October 2017 00:16 BST
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Spirits revenue dropped more than 7 per cent in the first financial quarter of 2017-18
Spirits revenue dropped more than 7 per cent in the first financial quarter of 2017-18

Sales of Scotch whisky in the UK have fallen by one million bottles after the Government increased tax on spirits in the spring Budget.

Official figures show 36.7 million bottles were released for sale in the first six months of 2017, down from 37.7 million in the same period the previous year.

The 2.6 per cent drop in demand follows the March Budget increase in spirits duty by 3.9 per cent, taking tax up to 80 per cent of the cost of a bottle of Scotch.

The Scotch Whisky Association has been calling on the Chancellor to cut tax on spirits in the Budget next month.

The association said of an average bottle of Scotch sold at £12.77, more than £10 goes to the Treasury, comprised of £8.05 in excise duty and £2.13 in VAT.

Her Majesty’s Revenue and Customs figures show the overall tax take from spirits has fallen since the Budget increase.

Spirits revenue dropped more than 7 per cent in the first financial quarter of 2017-18, down to £697m compared to £751m in the same period from April to the end of June the previous year.

This reversed a 7 per cent increase in spirits revenue from the freeze on excise duty in 2016, which boosted the Treasury by £229m.

The 2 per cent cut in spirits tax in 2015 led to a 4 per cent rise in spirits revenue, a £124m increase.

Karen Betts, Scotch Whisky Association chief executive, said: “Philip Hammond’s damaging 3.9 per cent spirits duty hike has hit UK demand for Scotch and seen less money going to the Treasury.

“The Chancellor should use his November Budget to drop the dram duty and boost a Great British success story.

“Cutting tax would send a strong signal that the Government believes in a world-famous UK manufacturing industry which supports 40,000 jobs and plays a key role in Scotland’s economy.”

PA

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