UK Scotch sales fall

HeraldScotland A Scotch whisky bottling line

HeraldScotland A Scotch whisky bottling line

Sales of Scotch whisky in the United Kingdom have declined after Chancellor of the Exchequer Philip Hammond hiked taxes on spirits, according to official figures that provoked calls to reverse the measure in next month's budget.

Official HMRC figures show 36.7m bottles were released for sale in the first six months of 2017 - down from 37.7m in the same period a year ago.

At the same time, supporting iconic British industries like Scotch whisky will be vital to the government's vision of boosting trade after Britain leaves the European Union in 2019.

The 2.6 per cent fall follows Chancellor Philip Hammond's decision to increase spirits duty in the spring Budget by 3.9 per cent, meaning tax now makes up 80 per cent of the cost of a bottle of Scotch.

"Philip Hammond's damaging 3.9% spirits duty hike has hit United Kingdom demand for Scotch and seen less money going to the Treasury", she said.

The SWA has launched a campaign - named "Drop The Dram Duty" - calling on the Chancellor to give fairer tax treatment to spirits in his November budget.

SWA figures show that on an average priced bottle of Scotch at £12.77, there will be excise duty of £8.05, VAT of £2.13, making a total tax £10.18, while the whisky is £2.59.

He added: "We urge the Chancellor to review the tax on spirits duty to ensure that the Scotch whisky industry continues to be a leading force of the United Kingdom food and drink sector on the global stage".

"The Chancellor should use his November Budget to Drop The Dram Duty and boost a great British success story".

Spirits revenue was down more than 7% in the first financial quarter of 2017/18 to £697 million from £751m in the same period from April to the end of June the previous year, according to the SWA.

Karen Betts, chief executive of the association, said the quarterly HMRC figures showed that the Treasury had made an error.

She said the whisky industry supported 40,000 jobs and played a key role in Scotland's economy, accounting for more than £4bn in exports.

In contrast, a 2% cut in 2015 saw spirits revenue rise by 4% - giving a £124 million boost to the Treasury - while a freeze in 2016 led to a revenue increase of more than 7% - a boost of £229m.

On Monday it emerged that the spirits of two "lost" distilleries that have been closed for 34 years are to be re-incarnated with a major investment.

A Treasury spokeswoman said: "We recognise the importance of the Scotch Whisky industry".