Norfolk gin-maker warns distilleries will close unless alcohol duty falls
Gin and whisky producers say a tax hike has led to £132 million less revenue for the Treasury
A gin-maker in North Norfolk is warning that more distilleries will be forced to close if alcohol duty isn't reduced by the Government.
It comes after a group representing spirit producers have said that a 10 percent increase to this tax, brought in over a year ago, has "sucked the life" out of the industry.
"There's currently a huge disparity between the amount of duty paid on different alcohols"
Sarah Saunders owns the 'Black Shuck Distillery' in Fakenham: "The last twelve months have been our toughest yet. It was full of political and financial uncertainty and because of that, a lot of non-essential spending has been stifled.
"We know that some people will now have given up the luxury of craft spirits and replaced them with mainstream alternatives from supermarkets
"But we've seen the number of people coming to our distillery continues to rise. I think that people are more interested than ever in the story behind the spirit."
She told us what Chancellor Rachel Reeves needs to do next:
"She needs to introduce special duty rates for small distilleries, as happened last year with small breweries.
"There's currently a huge disparity between the amount of duty paid on different alcohols. For example, the amount of duty paid on one litre of cider is less than 10p. But on a gin and tonic, that amount rises to over 30p."
What effect has this tax increase had?
This nearly one year old duty rise was the largest in almost 50 years.
It's added 20% to excise duty on more than 85% of all wines on the UK market and 10.1% to duty paid on full strength spirits.
According to ONS data, the average price of a bottle of red wine is up 8% to £7.85 on last year, while a bottle of gin is up 6% to £17.11 and fortified wine has risen by 17% to £11.67.
Gin and Whisky producers say this has led to £132 million less revenue for the Treasury, according to the government's own receipts, while 70% of distilleries in the UK fear for their ability to invest in their business as a result of the increase.
"She must be bold and back spirits"
Neema Rai is spokeswoman for the UK Spirits Alliance, said: "The previous Chancellor's alcohol duty hike saw the Treasury lose money. The new Chancellor has a choice. She must be bold and back spirits.
"Pubs are more than just pints, we need to be proud of our heritage and back our gins, whiskys, craft distillers and cocktail creators. Cutting alcohol duty in the Budget will ensure pubs can survive and help customers in a cost-of-living crisis."
What are the Government's plan?
The Chancellor will unveil the Government's plans for alcohol duty in late October, as part of the Autumn statement.