Spirits producers urge chancellor to halt duty increases
OVER 20 UK gin producers have teamed up to implore the chancellor of the exchequer to halt spirit duty rises in his Budget later this month.
The distillers, which include Edinburgh-based Pickering’s and Hendrick’s owner William Grant & Sons, have joined forces with the Wine and Spirit Trade Association (WSTA) and written to both chancellor Philip Hammond and secretary of state for business, energy and industrial strategy, Greg Clark, raising concerns over a planned 3.4% increase in spirits duty this month.
If the chancellor does press ahead with the increase – the second this year – the WSTA claims it will mean the Treasury collecting a further £25 million in gin duty compared to last year.
In March, Hammond increased spirit duty by inflation at 3.9%, adding 30p to an averaged priced bottle of spirits. The second, expected, 3.4% rise would add a further 26p to a bottle, the WSTA has said.
The increases, which are in line with inflation and planned to last for the remainder of this parliament, will draw £2 billion in revenue from British gin over the next five years, according to the organisation.
Spirits makers have warned that the burden will encumber the growth of start-ups, which are credited with helping to revitalise the category.
These hugely unfair tax burdens mean that cash flow is restricted when we are trying to grow.
Matthew Gammell, co-founder of Edinburgh-based Pickering’s Gin, said: “In 2016 Summerhall Distillery paid 31% of its annual turnover in duty alone.
“Our bottles retail at £29.95 which means that 45% of the money spent on a bottle of Pickering’s gin goes on duty and VAT.
“These hugely unfair tax burdens mean that cash flow is severely restricted when a business like ours is trying to grow.
“The current proposed increase in duty of 3.4% would mean an increase in duty of £24,500, which for us is the equivalent of another employee.
“We would like to continue to grow and help boost the economy but it is becoming increasingly tough to remain competitive in the marketplace.”
WSTA chief executive, Miles Beale, said the UK government was “stifling the gin boom by adding to its already high tax bill this year”.
“British gin is a global phenomenon which is why we are asking the chancellor why he is penalising what Britain does best?” said Beale.