Photographer: Matthew Lloyd/Bloomberg

Scotch Whisky Makers Sell a Million Fewer Bottles After Tax Hike

  • Chancellor Philip Hammond urged to drop 3.9% increase in duty
  • Whisky trade body says tax now makes up 80% of bottle price

Sales of Scotch whisky in the U.K. have declined after Chancellor of the Exchequer Philip Hammond hiked taxes on spirits, according to official figures that provoked calls to reverse the measure in next month’s budget.

U.K. Government figures show the industry released 36.7 million bottles of Scotch for sale in the first six months of 2017, down from 37.7 million in the same period the previous year.

The policy on spirits illustrates the dilemma for Hammond ahead of his budget next month. He has little room for tax sweeteners, given the U.K.’s budget deficit and the looming economic threat from Brexit. At the same time, supporting iconic British industries like Scotch whisky will be vital to the government’s vision of boosting trade after Britain leaves the European Union in 2019.

The Scotch Whisky Association industry body wants Hammond to scrap his March announcement of a 3.9 percent increase in spirits duty. The hike means 80 percent of the cost of a bottle is now made up of taxes, according to the association, which said less tax revenue was being generated as a result of the higher duty.

“Philip Hammond’s damaging 3.9 percent spirits duty hike has hit U.K. demand for Scotch and seen less money going to the Treasury,” Karen Betts, Scotch Whisky Association chief executive, said in an emailed statement. “The chancellor should use his November budget to drop the Dram Duty and boost a great British success story.”

    Before it's here, it's on the Bloomberg Terminal.
    LEARN MORE