Scotch whisky exports worth £4bn to UK

The Scotch Whisky Association has ramped up its efforts to secure a further 2% cut in duty for Scotch whisky, highlighting its contribution to the UK economy and the benefits of a cut to encourage further growth.

Scotch is the biggest contributor to UK trade in goods with exports now worth almost £4 billion, compared to imports in the supply chain, such as packaging for products and casks for maturing the spirit, only £200 million. Consequently the trade’s value is £3.8bn. Without the UK’s trade in Scotch, the country’s trade deficit would be 11% larger, says the SWA.

Duty on an average priced bottle of Scotch whisky currently stands at 76% following a historic 2% cut last year – the first cut in spirits duty in almost 20 years. It was only the fourth time that tax on whisky has been cut in the last century. Currently, the consumer pays around £9.91 in tax on every average priced 70cl bottle of blended Scotch whisky in the UK, the highest rate of any European country.

Launching its “Fair Tax for Whisky: Stand up for Scotch” campaign last month, the SWA said the cut has contributed to a £96m increase in revenue from spirit drinks to the Treasury between April and December 2015, compared with the same period in 2014. Revenue jumped 4% from £2,401m to £2,497m.

Now, the trade body is calling for the Chancellor to approve a further 2% cut in spirits excise the March Budget, that would take the total tax paid to 74%.

“These figures re-emphasise how significant the Scotch Whisky industry is to the Scottish and wider UK economy, adding more than £5bn of value and supporting around 40,000 jobs”, said David Frost, chief executive of the Scotch Whisky Association. “But it may surprise some people that Scotch Whisky is now the number one contributor to the UK’s balance of trade in goods and that the trade deficit would be 11% higher without whisky exports.

“Given the scale and impact of the Scotch Whisky industry, we believe the government should re-double its efforts to support distillers. At home, in the short term, a further 2% duty cut in next month’s Budget would be a major boost, supporting small businesses that rely on the home market and further investment in the sector.”

Nine new whisky distilleries opened in the last year two years (Annandale, Arbikie, Ardnamurchan, Ballindalloch, Dalmunach, Eden Mill, Glasgow Distillery, Isle of Harris, Kingsbarns), with a further 40 currently planned across Scotland.