A top boss at drink giant Diageo has warned the UK Government against triggering another downturn in Scotch whisky sales by serving up a tax rise in November’s Budget.
Charles Ireland, the company’s general manager for Great Britain, Ireland and France, said the move would be counterproductive because Treasury takings from Scotch fell when the chancellor imposed a 3.9% tax rise earlier this year.
Sales of the spirit dropped by a million bottles in the first half of 2017 following March’s tax rise, which pushed the UK duty on an average bottle to 80%.
Mr Ireland said the “unfair” levy not only harmed the domestic market but also overseas business by encouraging other countries to raise taxes too.
He added: “Our modelling shows there would be a negative impact on the strength of the market at home. The spirits market suffered a downturn when the last increase happened earlier this year and there would be another downturn if the tax is increased in the next Budget.
“On top of that, it will make it more difficult for us to argue against increases and unfair treatment overseas.”
Whisky is the UK’s biggest food and drink export, with Diageo holding about one-third of the global market.
A Treasury spokesman said: “Tax on a bottle of Scotch is 90p lower now than it would have otherwise been, thanks to duty freezes and cuts … in the last three years.”
