A BOTTLE of whisky will be £1.15 cheaper next year than if Labour’s alcohol duty escalator was still in place, Chancellor Philip Hammond has declared.
But the Treasury still picks up more than £10 for every bottle of Scotch sold in the UK, in spite of Mr Hammond winning praise from the industry after announcing a duty freeze on beer, wine and spirits in his Budget.
The Scotch Whisky Association (SWA) – bruised from defeat in its lengthy court battle with the Scottish Government over minimum unit pricing on alcohol – welcomed the freeze but said the Chancellor did not go far enough and should have cut duty.
The SWA said the freeze was a show of support for “a major UK manufacturing industry” and for the 40,000 jobs Scotch whisky supports across the UK.
However, the group argued that a cut would have provided a bigger boost for consumers, the industry and public finances.
Karen Betts, SWA chief executive, said: “We welcome the freeze in excise duty on spirits, which helps support the competitiveness of Scotch – a major UK export – in uncertain times. But tax on Scotch is still very high and we believe this is a missed opportunity.”
Total taxation, combining VAT and excise duty, on an average priced bottle of Scotch Whisky in the UK remains at 80 per cent, according to the SWA, sending more than £10 per bottle straight to the Treasury.
But the Chancellor argued pricing was in better shape since the Conservatives ditched Labour’s alcohol duty escalator in 2014. The measure had been introduced in 2008 to counter what was seen as a trend of increasing affordability, particularly in supermarkets, which was associated with rising consumption and harm.
In his speech yesterday, Mr Hammond said of the freeze: “This will mean a bottle of whisky will be £1.15 less in 2018 than if we had continued with Labour’s plans”.
Under the Scottish Government’s policy to introduce a minimum price of 50p per unit of alcohol in May next year, the cheapest price for a standard bottle of Scotch whisky will be £14, mitigating to some extent the benefit of the duty freeze on lower priced whiskies.
White cider products have also been targeted in the Scottish Government’s plans, which will see strong cider cost at least £3.75 per litre.
And these products face an uncertain future after Philip Hammond said the Government would legislate to increase duty on them.
The Chancellor did not give any further detail on how much duty would increase by on white cider products.
He said: “Excessive alcohol consumption by the most vulnerable people is all too often through cheap, high strength, low quality products – especially so-called white ciders. And so following our recent consultation we will legislate to increase duty on these products from 2019.”
Wine drinkers meanwhile will see a freeze in duty increases for only the second time in 15 years, a move which the Wine and Spirits Trade Association (WSTA) called a “win/win for both the Treasury and the industry”.
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