A Highland MSP is demanding Chancellor Jeremy Hunt U-turns on his plans to abandon a whisky tax freeze.
The SNP’s Emma Roddick insisted the treasury must not increase the alcohol duty levy and warned it could put the sector at risk.
The Scotch Whisky Association said the tax freeze must be “urgently reinstated” as distilleries in the north and north-east struggle to cope with the cost-of-living crisis.
Ex-Chancellor Kwasi Kwarteng announced plans to stop any future rises on the alcohol levy in his botched mini-budget last month.
But many of his sweeping tax cuts – including the alcohol duty freeze – were immediately undone by his successor Mr Hunt.
Now Rishi Sunak has taken over in No 10 from Liz Truss, the chancellor is expected to continue dismantling her financial agenda in his upcoming budget.
Whisky firms already face some of the highest alcohol duty rates and it’s feared further rises could harm businesses.
Writing to Mr Hunt, Highland MSP Ms Roddick said: “I have serious concerns that your plans to scrap the freeze will put a potentially unsustainable strain on businesses already experiencing spiralling costs.
“Not only does the freeze impact brewers and distillers, but also the pubs and restaurants they supply.
“As the tax duty increases, the price hospitality businesses pay for these products increases too – costs that are then passed on to their customers.”
She added: “Increasing costs even further could put the industry at risk and thousands of jobs too.”
‘Business needs certainty and stability’
Mark Kent, chief executive of the Scotch Whisky Association, said: “Business can only work on the basis of certainty and stability.
“That has been stripped from the Scotch whisky industry following the chancellor’s decision to U-turn on the duty freeze.
“A double-digit rise in spirits duty will now seriously reduce the industry’s ability to support the UK economy.
“It will add to pressures in the UK hospitality industry and household budgets as costs inevitably increase.
“Distillers are facing increasing economic headwinds and rising costs, the duty freeze offered much needed support.”
The UK Government estimated increases to the alcohol duty freeze will bring in an additional £600 million.
‘Difficult decisions’
A treasury spokesperson said: “A central responsibility of any government is to take difficult decisions to ensure economic stability and sustainable public finances.
“We recognise the challenges the hospitality sector is facing, which is why we are helping with their costs through the Energy Bill Support Scheme and business rates relief.
“Our historic alcohol duty review means that from next year drinks will be taxed according to strength which slashes the price of many beverages and cuts tax for more small producers.”
Last year it emerged the United States would suspend crippling 25% tariffs on single malt whiskies for half a decade.
Earlier this year SNP activists called for a whisky levy on firms in the north-east to be introduced.