A coalition representing various sectors, including drinks, tourism, and agriculture, has urged the Chancellor to maintain the current rate of spirits duty in the upcoming budget. This coalition comprises organizations such as the Scottish arms of the National Farmers’ Union, the Institute of Directors, and UKHospitality, among others. They argue that freezing the duty could serve as a strategic investment that may ultimately increase tax revenues.
The coalition highlighted that past increases in spirits duty have led to a significant rise in the overall tax on the average bottle of whisky, now reaching at least £12 or 70% of the retail price. This has reportedly contributed to around 1,000 job losses in the whisky production sector since last year. They claim that the existing duty regime, coupled with broader economic challenges, is putting substantial pressure on both producers and hospitality venues. Some businesses have reportedly paused investments or considered relocating abroad, while others have resorted to job cuts.
Signatories of the letter, which also includes the Scottish Grocers’ Federation and the Night Time Industries Association, assert that the higher duty has disproportionately affected bars and clubs. They provide data indicating that spirits sales account for 38% of hospitality sector profits, despite comprising only 15% of total alcohol sales. Additionally, recent statistics reveal a decline of 4.3 million bottles in whisky sales in the UK from 2023 to 2024.
The appeal to the Chancellor aligns with ongoing efforts by the Scotch Whisky Association to freeze spirits duty until 2029. The Association describes the Treasury’s recent approach as misguided, citing a lower-than-expected increase in spirits duty revenue. Inflation, rising wholesale prices, and declining consumer confidence are further complicating the industry’s economic landscape.
The Treasury has indicated that the Chancellor aims to balance public spending with economic growth but has not elaborated on specific tax plans. A spokesperson mentioned efforts to support the distillery sector, including reduced licensing fees and a cap on corporation tax, but did not address the specific issues faced by the hospitality and agricultural sectors.
Source: https://www.theguardian.com/food/2025/oct/19/scottish-hospitality-coalition-urges-chancellor-to-protect-whisky-industry