As a result of the increase, the level of tax - excise duty and Vat - on an average priced bottle of Scotch whisky is now 79%, one of the highest levels in Europe, and 21% higher than in 2010.
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| SWA says Budget excise increase is a blow to UK industry |
The association which represents the Scotch whisky industry, said it is time for a fundamental review of the alcohol duty system, describing the move as damaging to a major industry and at odds with the Prime Minister's words during a speech in Glasgow last week, where she described Scotch whisky as 'a truly great Scottish and British industry'.
The increase goes against recent experience that a duty cut would boost the public finances. Following a 2% cut in duty in 2015 and a rate freeze in 2016, revenue from spirits duty increased by 4.2%, or £132 million, to £3.25bn in 2016.
Commenting on the news, Julie Hesketh-Laird, Scotch Whisky Association, 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.“
She went on to say: "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."
The Scotch whisky industry supports more than 40,000 jobs across the UK, many in economically fragile areas, and adds value of around £5 billion annually to the economy.
Posted by Steve Rush