Distillers’ dreams of cracking international markets are being thwarted by repeated hikes to spirits excise duty, the industry has warned, as Rachel Reeves’s November Budget races closer. Britain should be “dominating the world” but is held back by a punishing tax regime, they warn.
MPs from across the political divide will unite this week to launch a report detailing the obstacles facing the sector as UK growth flatlines. Mike Cunliffe, director of Cornwall’s Pocketful of Stones distillery, said: “The United Kingdom should be dominating the spirits world globally, especially with gin and whisky. However, the duty system and the negative effect it has on growth, investment and innovation forces us to fight with one hand behind our backs.” He had a simple message for the Chancellor: “Make our lives easier at home, and we’ll go out and take over the world.”
Westminster’s all-party group on UK spirits took evidence from distillers across the country.
One stated: “Export is our number one objective. We’re building a premium UK rum brand with the clear aim of growing internationally. But the current duty system is holding us back.”
The MPs’ report will set out the impact a 10.1% duty hike under the Conservatives, followed by a further 3.65% increase by the Labour Government, has had on spirits producers, pubs and the wider hospitality sector.
The UK Spirits Alliance is calling for a complete freeze on duty in a Budget where the Chancellor is expected to raise taxes to fill a “black hole” in the public finances.
A Treasury spokesperson said: “The Chancellor has been clear that at the Budget she will strike the right balance between making sure we have enough money to fund our public services and ensuring we can bring growth and investment to businesses.
“Our distilleries are vital to Britain’s economy, so we’re making it easier for them to thrive: no export duty, lower licensing fees, reduced tariffs, and a cap on corporation tax.
“Whisky and gin exporters are some of the biggest winners from our recent India trade deal, cutting tariffs from 150% to 40% and boosting whisky exports by £1billion.”
