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Scotch whisky verification scheme at risk if independence goes ahead

Published:  04 March, 2014

A British government scheme set up in January to help consumers identify genuine UK-made products could be at risk should Scotland vote for independence.

The Spirit Drinks Verification Scheme operated by the UK Revenue and Customs, may not continue in its current state under independence.

Currently the UK scheme requires producers, blenders, bottlers, labellers and bulk importers to apply to HM Revenue and Customs (HMRC) if they want to be verified.

HMRC is then charged with verifying on all businesses involved in the production of the spirits to make sure they meet strict EU requirements.

The EU is the largest market for Scotch whisky exports and it will take time for Scotland to be recognised by the EU as a member state, which could also jeopardise access temporarily to the free trade agreements that the UK and the EU currently have. More than half a billion bottles of Scotch whisky are currently sold in the EU which was worth £1.3 billion in 2012, according to reports.

On the flip side, the industry as a whole may actually sell more products as the duty fees currently paid on the product could potentially be lowered. If Scotland had a lower duty regime, the English may go north of the border to acquire lower-taxed items like Scotch whisky or cigarettes, which in turn would drive demand for these products.

It is tough call for Scotch whisky producers and few have weighed in on either side of the debate.