Scotch whisky sales drop by 1M bottles after tax hike

By James Ridler contact

- Last updated on GMT

Scotch whisky sales have fallen since the Chancellor hiked spirits tax in the spring budget
Scotch whisky sales have fallen since the Chancellor hiked spirits tax in the spring budget
Scotch whisky sales have fallen by 1M bottles since Chancellor Philip Hammond hiked spirits tax in the March budget, claimed the Scotch Whisky Association (SWA), which is urging the Exchequer to lift the duty in next month’s budget.

Official Her Majesty’s Revenue and Customs (HMRC) figures revealed 36.7M bottles were released for sale in the first six months of this year – down from 37.7M in the same period last year.

The 2.6% fall in whisky sales followed the chancellor’s decision to increase spirits duty in the spring Budget by 3.9%. The rise meant 80% of the cost of a bottle of Scotch whisky was tax.

2.6% fall in whisky sales

HMRC figures also showed that the tax take from spirits had fallen since the duty was increased. Spirits revenue was down more than 7% in the first financial quarter of 2017/18 to £697M from £751M in the same period the previous year.

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.

The organisation argued that reducing tax on spirits would provide a greater boost to the treasurey. An example it gave was the 2% cut in tax in 2015, which saw spirits sales rise by 4%, providing a £124M boost to the Treasury.

‘Duty hike has hit UK demand for Scotch’

Karen Betts, SWA chief executive, said: “Philip Hammond’s damaging 3.9% 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.”

Meanwhile, whisky remained the UK’s most valuable exported product,​ with £1.82bn in sales over the first six months of this year, according to a report from HMRC.

Scotch whisky – tax at a glance

  • An average priced bottle of Scotch whisky is £12.77. Of this total, excise duty is £8.05, VAT is £2.13, making total tax £10.18, while the whisky is £2.59.
  • The rate of excise duty per litre of alcohol on Scotch whisky increased 47% between 2007 and 2017 from £19.56 to £28.74.

Related topics: Business News, Beverages

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