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UK Scotch drinkers pay double in tax across EU

Published:  11 March, 2016

Research from the Scotch Whisky Association has revealed the full extent to which the UK's Scotch drinkers are over-taxed.

Buyers of Scottish whisky in the UK contribute 38% of the total tax paid on Scotch across the EU - despite only drinking 17.5% of all Scotch consumed in the region.

This reflects the fact that at 76% of the price of an average bottle, the UK's tax on whisky and spirits is among the very highest in Europe - and 1.5 times the European average.

The average spirits tax in the EU is 49%, with Germany's tax rate 45% and rates in Italy and Spain set at 44% and 41% respectively.

UK spirits drinkers contribute £8.6 million in tax to the Treasury every day.

UK sales of Scotch returned to growth in 2015 after years of decline, the SWA recently reported.

Some 84.9 million 70cl bottles were sold in 2015, up 2% from 83.3 million the previous year.

UK sales of Scotch fell 5% in 2014 and are down by around a quarter since 2005, when 107 million bottles were sold.

The SWA has been campaigning for a further 2% cut in the duty on spirits in the 2016 Budget under the "Stand Up For Scotch" banner.

Last year's 2% cut led directly to a £96 million uplift in Treasury revenue from the sales of spirits up between its announcement and December 31.

The Scottish whisky industry support more than 40,000 jobs in the United Kingdom, many in otherwise deprived rural areas, and is reponsible for some £4 billion in export sales.

The SWA argues that last year's cut in excise duty is helping drive investment in the sector.

There are currently some 117 licensed whisky distilleries in Scotland. Nine have opened in the last two years - including Arbikie, Ballindalloch, Eden Mill, and the Isle of Harris - and a further 30 to 40 are in the planning stage.

David Frost, chief executive of the Scotch Whisky Association, said: "The Chancellor needs to Stand Up For Scotch again in next week's Budget and cut excise duty on Scotch Whisky by 2%. "Another cut will help deliver growth in this iconic British industry, while providing a fairer level of tax for Scotch Whisky drinkers in the UK."

Jonathan Isaby, chief executive of the TaxPayers' Alliance, said: "High taxes are holding back our most successful industries and the Budget is the perfect time for the Chancellor to cut duties on drinks.

"Not only will this ease the pressure on hard-pressed taxpayers, but it will create the conditions for jobs and growth. Past cuts have been hugely successful so George Osborne should seize the opportunity and show that he is on the side of both consumers and businesses."