Overview: The Scotch Whisky Association is actively requesting that Chancellor John Healey reduce spirits duty, warning that current taxation levels threaten sector recovery at a delicate stage. Mark Kent, chief executive of the association, argues there is no logic in taxing whisky more heavily than beer, wine, and cider, noting that UK spirits duty ranks highest among Group of Seven industrialised nations. This campaign precedes the Autumn Budget on October 28.
The Full Story
The industry is stepping up its campaign for a duty cut ahead of the Autumn Budget on October 28. Mark Kent stated it is unfair that consumers pay more tax than those who drink other alcoholic products, asserting that tax receipts fall every time the UK Government hikes duty. Despite former prime minister Sir Keir Starmer pledging to back Scotch producers before Labour came to power in July 2024, former chancellor Rachel Reeves announced a 3.65% rise in spirits duty in her first Budget, which came into effect in February 2025. That followed a 10.1% increase in August 2023 under previous chancellor Jeremy Hunt, with Ms Reeves announcing a further 3.66% increase in the Autumn Budget of 2025.
The combination of high duty levels and disproportionate taxation hits Scotland particularly hard because around 70% of all UK spirits are produced there, much of that being Scotch whisky. Mr Kent told The Herald that when looking at how people consume alcohol, it is illogical for someone choosing to have a dram to pay significantly more tax than someone drinking a pint. He emphasized that the current policy is very detrimental to the industry as it stands at a key moment following several years of upheaval.
New figures disclosed by the SWA show the value of Scotch whisky exports increased by 2.9% to £2.48 billion in the first half, with volumes up 6.3%. While exports to the US fell by 10%, volume to India rose by 10%. Mr Kent noted that the removal of tariffs by President Donald Trump in July is welcome, but broader market conditions remain challenging. The industry hopes to see a return to long-term growth trends that existed before Covid, requiring a supportive domestic policy environment to continue investing and creating jobs.
What This Means
A surge in demand during the pandemic has been followed by geopolitical and economic turbulence in major markets. Mr Kent said the recovery of the industry isn’t uniform, but positive signs are starting to appear in several places. Maintaining perspective is important as the sector navigates a delicate position where business conditions must be favourable for continued investment and exporting.
Consumer Takeaway
This news highlights the critical need for fiscal relief to ensure the industry can continue investing and creating jobs within Scotland. The stability of the domestic policy environment directly impacts the availability and pricing of Scotch whisky for consumers, ensuring that the sector remains robust against market volatility.
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