The UK is the most expensive place to buy a dram of whisky anywhere in Europe, the Scotch Whisky Association (SWA), has highlighted today.
Over one quarter of all the tax on spirits collected in Europe is paid for by Britons due to a domestic tax level, which is higher than the European average. The UK pays 26 per cent of spirits duty collected in the European Union despite having only around 11 per cent of its population.
The SWA is calling on the UK government to lessen the duty burden facing consumers and producers.
On a 70cl bottle of Scotch, people in the UK pay £7.74 in excise duty, compared to an EU average of £4.40. A further 20 per cent in VAT is then added on top of this to the retail price of whisky. In total, the price of an average bottle of Scotch whisky is made up of 77 per cent in tax. Only three countries in the EU tax spirits at a higher rate: Sweden, Finland and Ireland. The price of a single, 25ml dram of Scotch Whisky includes around 28p of excise duty, while the EU average is 16p.
The SWA points out that the Scotch Whisky industry contributes £5bn to the UK’s economy each year and supports some 40,000 jobs. The trade body argues that more government support is needed to help the industry invest and grow as it prepares for the UK’s exit from the EU.
SWA acting chief-executive Julie Hesketh-Laird said: “The Chancellor is in a strong position. He can reduce tax on Scotch whisky, help consumers as the threat of inflation grows and take the opportunity to boost one of the UK’s flagship industries. At the same time, as past experience has shown, this should lead to increased government revenue.”
However, the call for lower Scotch Whisky taxes didn’t go down smoothly in all quarters.
Colin Shevills, director of balance at Alcohol Health Alliance, said: “It is astonishing The Scotch Whisky Association are calling for a two per cent reduction in excise duty for whisky in the Budget given the tremendous cost alcohol carries to people’s health, our economy and wider society.”
“Reducing tax on Scotch whisky would have major implications for public purse. The Treasury’s own calculations show that tax cuts given to the alcohol industry over the past four Budgets will cost the public purse £790m in 2017/18 and a total of £2.9bnover five years”, he said.