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BHA joins campaign for 2% cut in duty on spirits

Published:  24 February, 2016

The British Hospitality Association has joined the Scotch Whisky Association, the Wine & Spirits Trade Association and other industry bodies in calling for a 2% cut in excise duty on spirits in chancellor George Osborne's forthcoming Budget.

A further reduction in excise would support competitiveness and help ease cost pressures across the sector, the BHA said.

The BHA represents over 7,000 businesses which provide some 250,000 jobs across the sector, says a 2% cut in excise would benefit its members and improve competitiveness with other countries.

Sales of spirits and wine account for around £5.4 billion, or more than 35%, of alcohol sales in UK pubs.

Overall sales of wine and spirits in the on-trade total some £10bn.

Willie Macleod, executive director of the BHA in Scotland, said: "A 2% cut in excise on Scotch whisky, and other categories of alcohol, would help ease some of the pressures on the hospitality sector.

"We operate in a competitive global market-place in which our customers are already paying high levels of tax, including the highest rates of VAT on hotel accommodation in Europe.

"A reduction in alcohol excise duty would show that the UK government realises it needs to support our hospitality industry and the employment it creates."

As part of its campaign for a 2% cut in duty, the SWA has released figures which show the scale of the whisky industry's importance to the UK's balance of trade.

Scotch is the single biggest net contributor to UK trade, with exports valued at around £4 billion and import costs, which include items such as packaging and casks for maturation, at just £200 million.

Without Scottish whisky, the UK's trade deficit would be 11% larger, the SWA argues in its 'Economic Impact of Scotch Whisky Production in the UK' report, published last week.

The industry also invests £1.7 billion a year in its supply chain, primarily in the UK, and supports salaries worth some £1.4 billion to the UK's workers.

The average tax paid on a bottle of spirits is around 76%.

David Frost, chief executive of the Scotch Whisky Association, said: "These figures re-emphasise how significant the Scotch whisky industry is to the Scottish and wider UK economy, adding more than £5 billion of value and supporting around 40,000 jobs.

"But it may surprise some people that Scotch Whisky is now the number one contributor to the UK's balance of trade in goods and that the trade deficit would be 11% higher without whisky exports.

"Given the scale and impact of the Scotch Whisky industry, we believe the government should re-double its efforts to support distillers.  

"At home, in the short term, a further 2% duty cut in next month's Budget would be a major boost, supporting small businesses that rely on the home market and further investment in the sector."