The Scotch Whisky Association (SWA) has called for a reduction in tax on whisky after UK sales fell by more than 1 million bottles in the first half of the year.
Government figures show 36.7 million bottles were released for sale in the first six months of 2017, down from 37.7 million last year.
The SWA said that the shrink is a direct result of chancellor Philip Hammond’s decision to increase spirits duty in his spring budget by 3.9%.
The association claims that tax now makes up 80% of the cost of a bottle of Scotch. Of an average bottle sold at £12.77, more than £10 goes straight to the government, through value added tax and excise duty.
Scotch adds £5 billion annually to the UK economy and the country is the world’s fourth biggest market for the spirit.
SWA claimed that increased taxes are having a negative effect on tax collections as well as whisky sales. In a statement, it said: “HMRC figures also show the tax take from spirits has actually fallen since Philip Hammond’s spring increase, meaning less money for the Treasury.
“Spirits revenue was down more than 7% in the first financial quarter of 2017/18 to £697 million, from £751 million in the same period from April to the end of June the previous year.”
SWA chief executive Karen Betts added: “Philip Hammond’s damaging 3.9% spirits duty hike has hit UK demand for Scotch and seen less money going to the Treasury.
“The chancellor should use his November budget to Drop The Dram Duty and boost a great British success story.
“Cutting tax would send a strong signal that the government believes in a world-famous UK manufacturing industry which supports 40,000 jobs and plays a key role in Scotland’s economy.”
Figures released earlier this year revealed that sales sales of spirits brought more money to the UK Treasury than beer for the first time ever, thanks to the growing popularity of gin.
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