Scotch industry ‘bigger than iron and steel’

The Scotch Whisky Association has strengthened its calls for a drop in duty on Scotch after research revealed the industry contributes £5 billion to the economy, making it bigger than the UK’s iron and steel, textiles, shipbuilding and computing industries.

The Economic Impact of Scotch Whisky Production in the UK report, published today and commissioned by the SWA, shows that the overall economic contribution of Scotch Whisky industry to the UK is £4.96 billion. For every £1 million of value added, the industry generates a further £520,000 across the UK, which is spent on suppliers in a range of sectors from packaging to haulage.

Scotch whisky producers spend a total of £1.8bn a year on suppliers, with 90% of that expenditure in the UK. Ignoring the industry’s wider economic benefits, the direct economic impact of the industry stands at £3.3bn, up 21% since 2008.

David Frost, chief executive of the Scotch Whisky Association, said: “This new report shows just how significant the Scotch Whisky industry is to the wider UK economy, adding £5bn of value, supporting over 40,000 jobs, and contributing £4bn to Britain’s trade performance. Scotch Whisky must be recognised as a cultural asset that boosts growth and jobs, supports communities and combines the best of the traditional and the modern.”

In Scotland, the industry makes up almost three quarters of the food and drink sector and is three times the size of Scotland’s digital or life sciences industries.

The report was published as the trade body stepped up its campaign to persuade the UK government to cut UK duty on wine and spirits, in partnership with the Wine and Spirit Trade Association and the Tax payers’ Alliance.

“Given the scale and impact of the Scotch Whisky industry we believe the government should show its support”, said Frost. “One way of doing so, in the short term, would be for the Chancellor to cut excise duty by 2% in the March Budget. It is unfair on the industry and consumers, and detrimental to the economy, that almost 80% of the average price of a bottle of Scotch is taxation.”

Currently, UK consumers pay nearly 80% tax on an average priced bottle of spirits and almost 60% on an average priced bottle of wine. That means 78% tax on whisky (£10.06 on an average bottle), 79% tax on gin (£10.03), 76% on vodka (£9.48) and 56% tax on a bottle of wine (£2.93).