The Scotch Whisky Association (SWA) urges the UK government to cut taxes and support producers.
- Prime Minister Keir Starmer had committed to backing Scotch producers before the election.
- An increase in domestic duty impacts the sector, reducing exports significantly by 18% in 2024.
- Despite high tariffs, exports to India grow, highlighting potential benefits of a Free Trade Agreement.
- SWA Chief Executive emphasises that government support is crucial for the industry’s resilience.
The Scotch Whisky Association (SWA) has formally requested the new UK government to implement measures in favour of Scotch whisky producers, aligning with Prime Minister Keir Starmer’s pre-election promise. This action entails reducing the tax burden at the upcoming Budget on 30 October, addressing the adverse effects of the 10.1% duty increase imposed in August of the previous year, which has significantly affected domestic operations.
In the first half of 2024, the SWA reported a stark 18% decline in the export value of Scotch whisky, as per data from HMRC. This drop to £2.1bn symbolises a notable dip in an industry that had previously experienced a record-breaking 2022. Concomitantly, export volumes diminished by 10.2%, equating to 566 million 70cl bottles, down from 40 bottles exported each second in 2023 to 36 per second in 2024.
India has emerged as the largest market by volume, showing a 17.3% growth in the first half of 2024. This is despite the current 150% import tariff remaining static. The SWA has therefore called for intensified efforts from the UK government to finalise the UK-India Free Trade Agreement, positing that even phased tariff reductions would mutually benefit both nations’ industries and potentially increase Scotch whisky exports by £1bn over five years.
SWA’s chief executive, Mark Kent, underscores the necessity for government action, stating that the numbers serve as a reminder of the industry’s vulnerability amidst short-term volatility. His statement stresses that while Scotch whisky remains a resilient sector, with exports reaching over 180 global markets, support is essential for navigating ongoing international turbulence and inflationary pressures on consumers.
The upcoming UK Budget presents a pivotal opportunity for the Labour government to demonstrate support for the Scotch whisky industry, which experienced the largest tax hike in 40 years last year, a move that ostensibly cost HM Treasury nearly £300 million in revenue. Reversing these duty increases could therefore not only enhance public finances but also support the industry during this challenging period.
Government support, through revised taxation and strengthened trade agreements, is critical for the Scotch whisky industry’s stability and growth.
