Published: Wednesday, 19th March, 2008 12:00
Scotch on the rocks
By Kevin McRoberts
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The rise in duty on spirits could threaten Wee County jobs, says MSP Keith Brown.
Pic by: Scotch Whisky Association
THE hike in spirits duty could threaten jobs and damage the Clackmannanshire economy, says Ochil MSP Keith Brown.
Mr Brown condemned Chancellor Alastair Darling’s Budget announcement of a nine per cent increase in spirits duty, describing it as a move by the Labour Government to “prop up embattled UK finances”.
And major drinks company Diageo, one of the biggest employers in Clackmannanshire, has also reacted with disappointment, saying the rise will send out a negative message and damage the industry.
Mr Brown said, “Any time the London government gets into financial trouble it always taps Scotland’s oil and whisky.
“Now with the war in Iraq costing £3 billion per year, and Northern Rock absorbing almost £2000 of taxpayer borrowing from every man, woman and child, it looks like it’s one of those times.
“This duty rise is irresponsible, and purely a way of making more money. It will not tackle binge drinking or alcohol problems because it is targeted on completely the wrong products.
“Here in Clackmannanshire we’ve already seen Carlsberg pull out, citing the poor state of the economy. None of us want to see any more jobs lost to balance Brown’s books.
“London’s responsibility for the economy should end and we should be able to follow the example of the prosperous independent countries that are our neighbours.
“Labour MPs should be ashamed of what their party is doing today to Scotland, and especially to Clackmannanshire.”
Scotland’s whisky industry generates £3 billion in exports annually and supports 41,000 jobs.
Locally, Clackmannanshire hosts five major Diageo facilities including a brand technical centre, which conducts high-level international functions.
Diageo’s whisky brands include high-selling blends such as Johnnie Walker, J&B and Bells, as well as single malts.
Benet Slay, Diageo GB managing director, said, “We are obviously very disappointed with the Chancellor’s decision to increase alcohol duty by such an extreme amount.
“Our industry is already contributing over £21 billion to the Treasury and is investing over £400 million in Scotch production.
“This decision flies in the face of Government creating good domestic conditions for an industry so crucial to this country’s economy.
“It sends out a negative message and sets a worrying precedent abroad. Worse, it penalises all responsible adults who enjoy a dram, a pint or a glass of wine.
“Given that spirits are taxed at a higher rate than wine and beer, this move exacerbates the unfair taxation gap and will significantly worsen it over the next four years.”
By alcohol content, whisky is currently taxed 23 per cent more than wine – and 43 per cent more than beer.
The Chancellor’s Budget decision will add 59 pence to the price of a bottle of Scotch Whisky, with around 75 per cent of the cost of a bottle of Scotch Whisky now made up of taxes.
The Scotch Whisky Association claimed the Chancellor had effectively abandoned government moves towards a fairer alcohol tax policy, worsening the duty discrimination against Scotch Whisky.
Gavin Hewitt, the association’s chief executive, said, “Scottish distillers are astonished by the Chancellor’s announcement.
“The government’s own figures show that any duty increase on whisky is likely to reduce revenue at a time when public finances are tight.”
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