Scotch Whisky Industry Acts Important in 2024

The Scotch whisky industry has expressed strong disappointment following Chancellor Rachel Reeves’ announcement of her first budget since the Labour Party took office earlier in 2024.

In the budget, Reeves declared that alcohol duties would rise with the Retail Price Index from February 2025, though a 1.7 percent duty cut would be applied to draught products sold in on-trade venues like pubs and bars.

The Scotch Whisky Association (SWA) condemned this decision, calling it a breach of previous commitments. SWA officials recalled Labour leader Keir Starmer’s pledge last year to fully support Scotch producers under his trade strategy. The SWA has long advocated for a reduction in whisky duties, especially after the 10.1 percent duty increase in 2023 under then-Chancellor Jeremy Hunt.

Mark Kent, the SWA's chief executive, described the new tax hike as a "hammer blow" to the industry. He stated, “Following last year’s 10.1 percent duty increase, which already reduced revenue for HM Treasury, this latest hike lacks any economic justification. It will harm the Scotch whisky industry, the Scottish economy, and goes against Labour’s promise to promote ‘Brand Scotland’.” Kent also criticized the Treasury’s approach, noting that higher taxes on spirits disproportionately impact the industry, with 70 percent of UK spirits produced in Scotland.

“The damaging 10.1 percent increase last year has now been compounded,” Kent added. “This new tax rise shows that no lessons have been learned, with the Chancellor opting for continuity over change. We call on MPs who support Scotch Whisky to oppose this duty hike and the biased taxation of Scotland’s national drink.”

The increase will likely push the minimum tax on a bottle of Scotch whisky over £12 for the first time.

Nuno Teles, managing director of Diageo GB, voiced his disappointment, noting, “Keir Starmer promised to ‘support the Scotch whisky industry to the hilt,’ yet the Government has imposed even more duty on spirits. This betrayal will leave a bitter taste for both consumers and the industry, threatening jobs and investment in Scotland.”

Simon Shelbourn, chief financial officer at Kingsland Drinks, added: “Higher taxes on non-draft alcohol penalize consumers at a time when many are already struggling with the cost-of-living crisis. Despite the government’s efforts to fill financial gaps, this move puts undue strain on consumers and the drinks industry, which has proven resilient in the face of relentless taxation and challenging market conditions. This decision sets back an industry positioned to contribute to economic growth.”