Chancellor Sajid Javid has faced calls to slash spirit duty in his March Budget to offset Donald Trump’s punitive tariffs on whisky.
The US imposed 25% tariffs on British food and drink exports in October as retaliation for the European Union’s illegal subsidies to plane-maker Airbus.
The Scottish Whisky Association (SWA) has said the industry could lose as much as 20% of its sales to the US, currently worth £1 billion, in the next 12 months if the tariffs remain at the current level.
Former Scottish secretary David Mundell, speaking in a Westminster hall debate on Thursday afternoon, said the tariffs had been “bitter blow” to the industry.
He said: “Distillers are now waiting, they have paused investment, reduced exports, delayed launching new brands, some have cut jobs in the US and have stopped hiring in Scotland.
“Over time, as stocks in the US market run down, the impact will be clearer. Some brands will disappear from the US market altogether as it becomes uneconomic for small distillers to export them. Market share and brand recognition built up over many years, once lost, will take a considerable time to rebuild.
“The longer these tariffs are in place the greater the impact will be on the industry in Scotland.”
Mr Mundell revealed that he had met the Chancellor to press the issue of freezing spirit duty to mitigate the cost.
“Any increase in excise duty in the March budget would be unacceptable”, he said.
West Aberdeenshire and Kincardine MP Andrew Bowie has also met Mr Javid and said he would like to see a cut in duty.
He said: “We all want to see an end to the unfair tariff regime imposed by the United States. I want the interests of Scotland’s whisky industry to be central to the future of trade negotiations with the United States and I do have faith the UK Government will champion the industry in those talks.”
He added: “We need targeted funding to help the industry through these tariffs, whether improving Scotch whisky tourism or doing something similar to the Distilled Spirits Council of the United States, which provides the US whisky industry with significant funding over £1 million to promote American whiskies in Europe. We could be responding to this in kind with our own ring-fenced funding.
“I’d like to see some radical thinking by the Government and some serious consideration of a cut to duty, possibly even on a trial basis to see how revenues respond.”
Scotland Office minister Douglas Ross, responding to the debate, reassured MPs the matter had been “raised at the highest level in both the UK and US administration.”
He added: “The president and the prime minister have discussed this issue on a number of occasions”.
“The UK Government is clear that these tariffs are not in the interests of the UK, the EU or the US and we’re working hard to support a negotiated settlement.”
On the issue of a cut in duty, Mr Ross said: “The Chancellor will be working with his Treasury colleagues to ensure that the commitment to review alcohol duty more broadly will be taken forward and there will be further announcements about the review in due course.”
