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UK freezes alcohol duty in budget

DBR Staff Writer Published 23 November 2017

UK Chancellor Philip Hammond has announced a freeze on wine, spirits and beer duty in his autumn Budget.

Hammond announced in Budget that duty will rise on cheap, high strength, low quality products, particularly white ciders.

Declining domestic budgets and falling pub sales have been the major factor behind freezing duty on alcohol. Hammond said a bottle of whisky will be £1.15 less in 2018 than if they continued with Labour’s plans.

It is the second time in 15 years that taxes on alcohol have been frozen in a budget statement. Previously, the government stated that duty on alcohol would rise with retail price index (RPI) inflation annually for the whole of Parliament’s term.

The present move has been welcomed by the Scotch Whisky Association (SWA), which had recently lost an appeal in the UK Supreme Court, against the Scottish government’s move to introduce minimum unit pricing for alcohol.

SWA stated that the freeze on duty is gesture of the government’s support for a major manufacturing sector in the country that employs up to 40,000 people. And also stated that cut in the duty could have further boosted the industry.

According to SWA, on an average, a bottle of Scotch whisky is taxed at 80% of its cost and these taxes include VAT and excise duty. This translates to more than £10 per bottle being collected by the government.

Scotch Whisky Association CEO Karen Betts said: "We welcome the freeze in excise duty on spirits, which helps support the competitiveness of Scotch - a major UK export - in uncertain times.

“My thanks go to all MPs and MSPs who have supported Scotch and helped convince the Chancellor that a second duty rise in 2017 would have hurt the industry and consumers.

Image: This is the second time in fifteen years that duty on alcohol was frozen. Photo: Courtesy of The Scotch Whisky Association.