Whisky industry gives Chancellor both barrels over duty increase

JEREMY HUNT has been accused of stifling the Scotch whisky industry after he failed to protect drinkers from a 10 per cent rise in alcohol duty.

Industry leaders dismissed the Chancellor’s claims that he was giving pubs a Brexit dividend and accused Mr Hunt of imposing a “Budget of bad news” on consumers.

Duties for beers not sold on draught, wines and spirits will rise by an expected 10.1 per cent in August, in line with inflation – meaning drinkers will suffer some of the highest price increases in more than 20 years.

Mark Kent, the chief executive of the Scotch Whisky Association, said: “This is a budget of bad news as far as we’re concerned. It’s bad news for the consumer, it’s bad news for inflation. A 10.1 per cent rise in duty is the highest since 1981. It’s bad news for spirits, it’s bad news for Scotch, and it’s bad news for Scotland, which produces 90 per cent of all the spirits in the UK.”

Mr Hunt unveiled a “Brexit pubs guarantee”yesterday, which will increase tax relief on draught beers and ciders from August 1 as part of efforts to keep the hospitality industry competitive with supermarkets.

He said the move was only possible because of Brexit, because the European Union does not allow member countries to levy different taxes based on the package drinks are sold in.

However, pub bosses warned relief for draught beers would not keep them afloat as costs soar. The British Beer & Pub Association (BBPA) is anticipating a £220million hit to the industry’s finances when duties rise in August.

Emma Mcclarkin, the chief executive of the BBPA, said: “The cut to draught duty is positive and we hope it will be a boost for our pubs this summer.”

However, she said: “Our industry will be facing an overall tax hike, not a reduction come August. Duty on nondraught beer will rise and the measures introduced today won’t rebalance the catastrophic impact soaring inflation and unfair energy contracts are having on both pubs and the breweries that supply them.”

The new duty rates were originally due to come into force in February. In December, the Treasury announced it would postpone the rise until August.

For wine companies it will be their single biggest tax rise in 50 years.

The draught beer tax cut was broadly welcomed by JD Wetherspoon boss Tim Martin, who said: “Any reduction in the tax disparity between pubs and supermarkets is welcome.”

Smokers are also set to face rises in the price of cigarettes, with duty rising for the first time since October 2021. Taxes will rise in line with inflation plus an extra 2 per cent on cigarettes and 6 er cent on rolling tobacco.