No tax increase on Scotch whisky

The Scotch Whisky Association (SWA) is in good spirits today.

The reason? During today's Budget statement, the UK Government announced that it would not be increasing the excise duty on alcohol.

This announcement follows weeks of uncertainty within the whisky industry.

In an earlier Budget announcement, on 23 September, the Government had promised that the excise duty on alcohol would remain frozen at its current level. Obviously, that announcement was welcomed all over the whisky industry.

However, there were serious problems with some of the proposals in that earlier Budget (nothing to do with the alcohol duty), and many of those proposals were reversed within days. The Chancellor (i.e. the Finance Minister) who drew up that Budget was sacked, and a new Minister took his place. Within days, he had binned the discredited Budget.

The new Minister made clear that taxes would have to go up in many areas. Almost everything was up for reconsideration, including the freeze on alcohol duty.

This news sent the whisky industry into a panic. In the weeks leading up to today's announcement, there had been serious lobbying to get the Minister to retain the freeze. One of the main arguments was that removing the freeze on alcohol duty would have an adverse effect on the hospitality industry - for example, many would simply stop buying whisky.

The SWA also sternly reminded the Government that the average bottle of whisky already suffers 70% alcohol duty. Piling on more taxes would be unacceptable.

So you can imagine the SWA's relief when the Government announced today that the alcohol duty freeze would remain in place. Actually, the Government has deferred till next year a decision on the duty rates. So, for this year at least, there will be no increase in the taxes on Scotch.