Whisky makers lament duty hike
GIN and whisky-makers say the “disastrous”
10.1% increase in alcohol duty has “sucked the life out of a boom industry” one year on from its introduction.
Alcohol duty hikes in August last year were the largest in almost 50 years, adding 20% to excise duty on more than 85% of all wines on the UK market and 10.1% to duty paid on full strength spirits.
According to ONS data, the average price of a bottle of red wine is up 8% to £7.85 on last year, while a bottle of gin is up 6% to £17.11 and fortified wine has risen by 17% to £11.67.
Gin and whisky producers said the sector was a boom sector until being hit with the triple whammy of Covid, the cost of business and then the increase in excise duty.
They say the duty increase has led to £132 million less revenue for the Treasury, according to the government’s own receipts, while 70% of distilleries in the UK fear for their ability to invest in their business as a result of the increase.
Liam Hirt, from Circumstance Distillery in Bristol, said: “The business has been going for 10 years and we have grown from one man operating in the basement of his house to a five-man team with two sites that export internationally.
“The 10.1% hike in duty has had a serious impact on the business. We already had price shocks from energy prices and the increase in cost of raw material after Brexit and the pandemic, so couldn’t absorb the increase. Sales have taken a sizeable hit as on trade and off trade have also seen costs rise and consumers squeezed.
“It’s very simple really. The current tax regime is weighted significantly in the favour of beer and cider, which means it is very difficult for spirits to compete, particularly in the on trade. There is no good reason why a unit of alcohol in spirits is taxed much, much more than a unit in beer or cider.”