Freeze on duty welcomed by whisky chiefs

SCOTCH whisky firms are set for a financial boost after Philip Hammond yesterday unveiled a freeze on alcohol duty.

Industry experts believe the Chancellor’s move on wine, beer and spirits – including whisky – will secure jobs, increase sales and give the sector a ‘real shot in the arm’.

Mr Hammond announced that the UK Government will legislate to increase the duty on ‘cheap, high-strength, low quality’ alcohol products including ‘so-called white ciders’ in a bid to tackle binge drinking across the country.

But he said ministers were aware of the ‘pressure on household budgets’ and, in a pledge to boost the country’s drink and pub sectors, he unveiled the duty freeze for wines, beers and spirits.

The move has been welcomed by Scotland’s whisky sector, which suffered a blow when the UK Supreme Court ruled the Scottish Government could impose minimum unit pricing for alcohol.

The Scotch Whisky Association (SWA) had challenged but lost after a five-year legal battle.

Firms will see a boost after Mr Hammond cancelled a planned increase of around 4 per cent on excise duty.

Instead, the current rate of duty will be frozen next year – following a 4 per cent rise in March this year from the Government’s previous Budget.

Mr Hammond said: ‘This will mean that a bottle of whisky will be £1.15 less in 2018 than if we continued with Labour’s plans, and a pint of beer 12p less.’

Lindsay Gardiner, regional head for PwC in Scotland, said: ‘One sector that will be pleased there has been no change for it is the whisky trade, as there are many there who feel they have taken their hit for the month with the minimum pricing announcement last week.’

Last night Scottish Conservative leader Ruth Davidson said the freeze would give a ‘real shot

‘Some respite for drinkers’

in the arm to our most important export’.

The move was welcomed by whisky bosses, who said the duty freeze would benefit consumers as well as the industry and economy.

They also praised Miss Davidson and Scottish Conservative MPs – claiming they have led the way in calling for additional support for Scotland’s whisky industry.

Charles Ireland, managing director of drinks company Diageo, said: ‘The duty freeze provides some respite for Britain’s drinkers, although taxes on spirits remain amongst the highest of any major economy in the world.

‘We have been greatly encouraged by the fantastic support of parliamentarians from all parties, especially Ruth Davidson, David Mundell and the other Scottish Conservative MPs, who have called for a fairer deal for Scotch and spirits: an industry that generates £5billion of exports and employs 50,000 people.’

Mr Ireland also called for a review of the duty system, claiming a fairer deal for the whisky sector was needed as it is a ‘unique British product the UK needs to thrive after Brexit’.

The SWA had been lobbying for a duty cut, rather than a freeze, but chief executive Karen Betts praised the Chancellor’s announcement.

She said: ‘We welcome the freeze in excise duty on spirits, which helps support the competitiveness of Scotch – a major UK export – in uncertain times.’

An average-priced bottle of whisky costs around £12.77, of which £10.18 is paid in tax, including excise duty and VAT.