Scotch Whisky sales in the UK have fallen by 1million bottles after Chancellor Philip Hammond hiked spirits tax in his March Budget.
Official HMRC figures show 36.7million bottles were released for sale in the first six months of 2017 – down from 37.7million in the same period last year.
The 2.6% fall follows the decision to increase spirits duty in the spring Budget by 3.9%, meaning tax now makes up 80% of the cost of a bottle of Scotch.
Of an average bottle sold at £12.77, more than £10 goes straight to the Treasury. Following the drop in domestic demand for Scotch, Mr Hammond is being urged to cut excise duty on spirits to protect the UK’s leading food and drink export, which supports 40,000 jobs.
The Scotch Whisky Association has launched a Drop The Dram Duty campaign calling on the chancellor to give fairer tax treatment to spirits in his November budget.
It comes after HMRC figures also show the tax take from spirits has fallen since Mr Hammond’s spring increase.
Spirits revenue was down more than 7% in the first financial quarter of 2017-18 to £697million from £751million in the same period from April to the end of June the previous year. In contrast, a 2% cut in 2015 saw spirits revenue rise by 4% – giving a £124million boost to the Treasury. And a freeze in 2016 led to a revenue increase of more than 7%, pouring an additional £229million into the chancellor’s coffers.
Karen Betts, Scotch Whisky Association chief executive, said: “Philip Hammond’s damaging 3.9% spirits duty hike has hit UK demand for Scotch and seen less money going to the Treasury.
“The chancellor should use his November Budget to drop the dram duty. Cutting tax would send a strong signal that the government believes in a world-famous UK manufacturing industry which supports 40,000 jobs and plays a key role in Scotland’s economy.”
