The UK Government has come under fire from Scotland’s Scotch Whisky industry, with the Scotch Whisky Association (SWA) accusing Chancellor Rachel Reeves of failing to honour the Prime Minister’s promise to “back Scotch producers to the hilt.”
In her inaugural budget, Chancellor Reeves announced a duty increase in line with the Retail Price Index (RPI), adding another financial blow to the industry by excluding Scotch Whisky and other spirits from a 1.7% duty cut on draught products in the on-trade.
The SWA had urged the Chancellor to reverse last year’s damaging 10.1% duty hike on spirits, a rise that cut spirits revenue by hundreds of millions of pounds, costing both the industry and government treasury alike.
Rather than responding to these calls, Reeves’ new policy has raised concerns within Scotland’s drinks sector, where producers now face what SWA Chief Executive Mark Kent describes as “increased tax discrimination of Scotland’s national drink.”
With spirits already bearing the highest tax rate among G7 countries, the SWA warns that further increases will harm the Scotch Whisky industry, one of Scotland’s most iconic exports and a critical driver of jobs and growth across the country.
The SWA has also highlighted that the Treasury’s tax policy disproportionately targets spirits, of which 70% are produced in Scotland, making the impact on the Scottish economy particularly severe.
Chief Executive Kent minced no words, calling the hike a “hammer blow” that runs counter to Labour’s campaign commitment to support “Brand Scotland” and adding that “this further tax rise means lessons have not been learned, and the Chancellor has chosen continuity with her predecessor, not change.”
The SWA is now calling on MPs who value Scotland’s national drink to take a stand by voting against the duty hike, underscoring that the policy, if unchallenged, will hurt not just Scotland’s whisky producers but the hospitality sector and cost-conscious consumers alike.
If the trend continues, the association warns, Scotch Whisky’s future competitiveness may be eroded, dampening the government’s ability to meet revenue targets and impacting the wider Scottish economy in the long run.
