Scotland business

Scotch whisky producers toast cut in spirits duty

Hands toasting with whisky

Scotch whisky producers have welcomed a decision by the UK government to cut excise duty on spirits by 2%.

The Scotch Whisky Association (SWA) said the move was "both fair to consumers and a significant boost to a home-grown industry".

The cut was announced by Chancellor George Osborne in his Budget statement.

The SWA said it was the first cut in spirits duty in almost 20 years and only the fourth time that excise on whisky had fallen in a century.

According to the trade body, the duty burden on a 70cl bottle of Scotch at the average price of £12.90 has been reduced by 16p from £7.90 to £7.74.

The total tax burden, including VAT, now stands at £9.89, or 77% of the average price of a bottle of Scotch - down from 78%.

'Historic decision'

SWA chief executive David Frost said the tax cut was "a historic decision".

He said: "The chancellor's announcement will be toasted across the whisky industry and by consumers who are getting a fairer deal on tax when they have a drink of Scotch.

"The move is a major boost to our industry as we look to grow again in the UK, and equally sends out an important signal on fair taxation to our export markets.

"The industry is raising a glass to George Osborne and his Treasury team, as well as to all those who have supported our campaign over the last two decades."

Earlier this month the SWA released figures showing that the UK market for Scotch whisky shrank by almost 5% last year.

It attributed the drop to "onerous" levels of taxation.

In last year's Budget, Mr Osborne froze duty on spirits and scrapped the alcohol duty escalator, which had increased duty annually by inflation plus 2% since 2008.

Liz Cameron, chief executive of the Scottish Chambers of Commerce, said: "The reduction in duty on beer, cider, whisky and other spirits is a very welcome boost to some of Scotland's strongest growing and most innovative businesses and sends out a clear message that we value the contribution that these businesses make to our economy.

"In addition to the established whisky industry, Scotland is at the forefront of the rapidly expanding craft beer sector and these duty reductions will help these industries to prosper."

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