Scotch Whisky pours £5bn into UK economy

Posted on 26 Jan 2017 by Jonny Williamson

The Scotch Whisky industry annually contributes almost £5bn to the UK economy, supports more than 40,000 jobs and is the largest net contributor to UK exports, according to new research by the Scotch Whisky Association.

The report – The Economic Impact of Scotch Whisky Production in the UK – finds that the government’s support of Scotch Whisky in recent years has led to a boost in revenue and supported a wave of new distillery openings – 14 since 2013.

Up to a further 40 new distilleries are reportedly planned across Scotland, with seven expected to open this year alone.

The research reinforces Scotch Whisky’s position as a strategically important industry for the UK in terms of value it adds to the economy, jobs supported, investment and export performance, and should be better supported by government.

The SWA highlighted that the current “onerous” taxation level, 77% of the price of an average bottle of Scotch, is too high and is therefore calling for a 2% spirits excise duty cut to encourage further investment and job creation..

The onerous 77% tax on an average priced bottle of Scotch Whisky exists despite a freeze in excise in last year’s Budget, a 2% cut the previous year and the scrapping of the alcohol duty escalator – which annually increased excise by inflation plus 2% – in 2014. The SWA wants the UK Government to ‘pursue a ‘Fair Tax for Whisky’.

As well as boosting the Scotch Whisky industry, the government’s changes to excise in the last few years have benefited the public purse. In the 12 months to the end of October this year, the Treasury secured around an additional £100m from spirits duty – including the tax consumers pay on a bottle of Scotch Whisky. But the industry says it still deserves fairer tax treatment.

 Julie Hesketh-Laird, acting chief executive of the Scotch Whisky Association, highlights the 77% tax (excise duty & VAT) on an average priced bottle of Scotch Whisky in the UK - image courtesy of SWA.
Julie Hesketh-Laird highlights the 77% tax (excise duty & VAT) on an average priced bottle of Scotch Whisky in the UK – image courtesy of SWA.

Acting chief executive of SWA, Julie Hesketh-Laird explained: “Scotch Whisky is one of the UK’s most strategically important industries. Without valuable Scotch exports of around £4 billion a year, the UK’s trade deficit in goods would be 3% larger.

“But we are calling on the government to ‘Stand up for Scotch’ by addressing the high and unfair level of taxation distillers face in their home market. The current tax of 77% on an average priced bottle of Scotch Whisky is a burden on consumers and the industry. And the government’s own figures indicate that fairer tax treatment leads to increased revenue for the public purse.

“We are calling on the UK government to cut excise by 2% in next month’s Budget, supporting a great Scottish and British industry at a time of uncertainty, giving us a stronger domestic platform from which to invest and grow to make a success of Brexit.”