Distillers lobby the Treasury for 2 per cent cut in duty on whisky

Tax now accounts for ‘nearly 80%’ of the price of a bottle of whisky

The alcohol industry is lobbying the Treasury to reduce tax on wine and spirits by 2 per cent in March's Budget.

Danny Alexander, Chief Secretary to the Treasury, will face calls to introduce the cut at a meeting in his Highlands constituency early next month. The Liberal Democrat has six whisky distilleries – one of which belongs to drinks giant Diageo – in his Inverness, Nairn, Badenoch and Strathspey seat.

A source close to the campaign said "excise duty will feature high on the agenda" at a meeting that takes place just weeks before the Budget.

Mr Alexander and his Conservative Treasury colleague, Priti Patel, are thought to be sympathetic to the proposal. A source close to Mr Alexander said: "Danny has previously supported the industry – he has a long-standing interest in the whisky and distilling industry. It's an important part of Scottish life."

The Drop the Duty campaign, which is backed by the Wine & Spirit Trade Association, the Scotch Whisky Association (SWA) and the TayPayers' Alliance, argues a small cut would boost public finances by £1.5bn. Accountant EY said much of this boost would be the result of increased investment across the industry and more jobs in pubs, restaurants and off licences.

Beer received a similar cut in last year's Budget, saving drinkers 1p a pint. Chancellor George Osborne also announced a freeze on spirits' duty, but the industry wants the Treasury to go further.

Campaigners argue that alcohol is too heavily taxed, with duty accounting for more than £10 on bottles of whisky and gin. Tax accounts for about 76 per cent of the price of a typical bottle of vodka and 56 per cent of a bottle of wine.

An SWA spokesman said: "The Scotch Whisky industry welcomed Danny Alexander's support for a duty freeze last year but with tax still accounting for nearly 80 per cent of an average bottle's price, more action is needed. When we see [him] at the end of the month, distillers will make the case for a 2 per cent duty cut as a further step to support the sector at a time when there are challenging market conditions at home and abroad."