‘The Final Nail in The Coffin’: UK Spirits Coalitions Push For Freeze on Whisky Tax Hike

The Scotch Whisky Association and other organizations are advocating for a tax freeze. (Photo: Press Association via AP Images)

On Monday, Harpers Wine & Spirit Trade News reported that The Scotch Whisky Association, UK Spirits Alliance, English Whisky Guild and the Wine and Spirits Trade Association sent an open letter to Jeremy Hunt, the British treasury Chancellor, asking him to end the duty hikes on whisky.

The organizations warned Chancellor Hunt that any increases in taxes would continue to aggravate inflation, although Hunt pledged to tackle the issue by the end of 2023.

“After the largest tax rise in almost 50 years on alcoholic drinks in August, the chancellor should rule out any further rises in this Parliament,” Wine and Spirits Trade Association CEO Mike Beale wrote in the letter. “Any further increase would undermine the government’s priority of bringing inflation under control.”

In August, The Scotch Whisky Association initiated a campaign to put a stop to a 10.1% duty increase that was proposed in March 2023.

The tax hike was announced by Chancellor Jeremy Hunt as part of the United Kingdom’s spring budget. Though it was meant to solve the country’s inflation woes, the organizations in the open letter claimed it had the opposite effect.

“The damage done by August’s hikes is clear: they have stoked inflation, pushed up prices for cash-strapped consumers and damaged British businesses all across the hard-hit alcoholic drinks and hospitality sector, including distillers. A second alcohol duty rise would be self-defeating and could prove the final nail in the coffin for some British drinks businesses.”

The U.K.’s economic outlook has been grim for the booze and hospitality sector, and appears the increased duty hasn’t been helping the situation.

In October, the Spirits Business reported that Britain’s licensed bars and restaurants had dropped to below 100,000.

On the distilling front, Chivas Brothers could be facing a potential strike as employees were set to vote on a strike action due to disputes over wages.

The Spirits Business reported that as of Oct. 17, it seemed likely the employees would vote on the action unless the offer was “significantly improved.”

It appears the rising costs associated with inflation and untenable costs of living are being felt in all facets of the whisky industry.

“Raising alcohol duty was a mistake the chancellor shouldn’t repeat in November,” Scotch Whisky Association CEO Mark Kent said, according to Harpers. “Distillers fear a further tax increase, the impact of which won’t just be felt by drinks producers but the businesses they support and ultimately by consumers. Mr. Hunt has promised to lower inflation and to help deliver on that promise he needs to rule out any further increase to alcohol duty.”

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