Excise duty increases a "major blow" to Scotch Whisky industry

Increases on excise duty are a “major blow” to the Scotch Whisky industry, according to the body which represents it.

The Scotch Whisky Association (SWA) has now called for a “fundamental review” of the alcohol duty system.

Duties on alcohol are to increase in line with inflation at 3.9%, and will apply from next week.

The SWA said the move “undermined competitiveness” at a time when the Government should be supporting home-grown exporters.

The organisation said that the level of tax, excise duty and Vat, on an average priced bottle of Scotch Whisky was now 79%.

The excise duty on a 70cl bottle of Scotch was £8.05 and the total tax was £10.20, the SWA said.

Julie Hesketh-Laird, SWA acting chief executive, said: “A nearly 4% duty rise and a 79% tax burden on a bottle of whisky is a major blow, reversing recent progress.

“Distillers will find it hard to understand why the Chancellor is penalising a strategically important British industry with this tax increase.

“At a time when government should be supporting a key home-grown sector, we face a damaging tax rise on top of the uncertainties of Brexit.

“Looking to the autumn Budget, we will be arguing strongly that it is time for a new approach to excise duty outside the constraints of EU excise law.

“The system is in need of a fundamental review and reform to make it fair and competitive.”

Charles Ireland, managing director of drinks firm Diageo Great Britain, said: “Today's tax blow from the Chancellor is bad for the economy, bad for business and bad for the British public.

“We believe this duty rate increase will reduce total tax revenue.

“We are calling on the Government to reverse this punitive tax hike and fundamentally overhaul what is clearly a flawed excise duty system.”