The Scotch Whisky Association (SWA) and the Wines & Spirits Trade Association (WSTA) have welcomed the UK government’s announcement to freeze duty on spirits, reversing the planned double-digit increase.
“This will save consumers £1.35 on the average priced bottle of Scotch whisky and help the industry as it deals with the dual challenge of rising energy costs and supply chain pressures,” SWA Chief Executive Mark Kent said.
“The duty freeze will not only support our sector, but the hospitality industry and the wider economy.” Kent added that now “further action will be needed” to reduce the 70% duty on Scotch in the UK, which remains the highest in the G7.
The WSTA has also welcomed the freeze, but noted that the Government’s proposals published in response to the Alcohol Duty Review Consultation mean wine between 11.5% and 14.5% will be taxed at the mid-point – but only for 18 months.
“After that, the Treasury is set to tax wine by strength adding a costly administrative burden for UK wine businesses and consumers. Fortified wine will be offered no transition, meaning the outlook is even worse,” he added. “We need a permanent and simple way of taxing wine, the UK’s most popular alcoholic drink. An 18-month transitional period fails to do this and it is not available to all wines.
“These latest proposals will be bad news for consumers worried about the cost of living; and create complexity, burden and cost for UK businesses.”
The cancellation of planned increases to duty on spirits, beer, cider, and wine was announced by Chancellor Kwasi Kwarteng during a speech on Friday. The freeze on duty from February 2023 comes after former Chancellor Rishi Sunk announced a duty freeze for the sector in his October 2021 budget.