The Scotch Whisky Association has urged the government to consider cutting duty on spirits after the value of scotch exports slid by 18% in the first half of 2024.
Export value in the first six months of 2024 was £2.1bn, down £463.2m on the same period of 2023. Volumes meanwhile, fell by 10.2%, or the equivalent of 566 million 70cl bottles.
Publishing the figures, which are collated by HMRC, the SWA called on Keir Starmer’s government to “back scotch producers to the hilt” as its leader had promised in the run up to the general election.
Starmer and Chancellor Rachel Reeves could begin by reducing the tax burden on scotch in next month’s budget, the SWA said.
“The UK budget on 30 October is the first opportunity for the new Labour government to show it truly supports scotch,” said SWA boss Mark Kent.
The 10.1% inflation-linked increase in spirits duty last August had cost the Treasury “almost £300m in tax revenue”, Kent claimed.
“Beginning to reverse the damage by cutting duty on scotch whisky will boost public finances and bolster the industry through this challenging period,” he added.
By value, the US remained scotch’s largest export market, but continued to “feel the impact” of 25% tariffs levied between October 2019 and March 2021, the SWA said. These tariffs had cost scotch “£600m in lost exports and market share”, it added.
“The permanent elimination of this tariff, going beyond the current five-year suspension, would remove uncertainty, give the industry increased confidence and allow our full focus to be on growing in this highly competitive spirits market,” Kent said.
Scotch whisky exports to India continue to grow, with volumes up 17.3% in the first half of 2024, despite import tariffs of 150% levied on the spirit.
The UK government should “redouble efforts to conclude the UK-India Free Trade Agreement”, the SWA said, adding this could bolster the value of scotch whisky exports by £1bn over five years.
“Securing a deal which reduces the tariff would be a major boost to the industry and help to mitigate the impact of a slowdown in other global markets,” Kent added.
Data for full year 2024 exports will be published by the SWA in February 2025.
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