SCOTCH WHISKY COSTS TO RISE SKY HIGH

 cost of scotch to double by mid-2023

Latest survey finds 30% of Scotch distillers expect energy costs to double in the next 10 months; with 72 % expecting shipping costs to go up by a further 50%.

Scotch Whisky distillers have called on the new Prime Minister and Chancellor to back the industry in the Autumn Budget by cancelling the planned double-digit tax increase.

The tax burden on the average-priced bottle of Scotch Whisky already sits at 70% due to high rates of spirits duty. A new survey reveals over half of Scotch Whisky distillers have seen their costs double in the last 12 months and expect further increases in the next year.

A survey conducted by the Scotch Whisky Association (SWA) found that 57 % of distillers have seen energy costs increase by more than ten % in the last year, with nearly a third (29 percent) seeing their energy costs double. Nearly 40 % of businesses, which produce the UK’s number one food and drink export, reported shipping costs doubling in the last 12 months, with 43 % also reporting supply chain cost rises of more than 50 %.

The survey also found most distillers see costs rising further over the next year, with 57 %of businesses expecting energy costs to go up by a further 50 % and nearly three quarters (73 %) anticipating another 50 % increase in shipping costs. However, despite rising costs, the industry expects to continue to invest in operations and the supply chain. 57 % of distillers reported an increase in their number of staff in the past 12 months, with all respondents expecting to need to add to their workforces in the coming year.

The Scotch Whisky Association has called on the new Prime Minister and HM Treasury team to commit to supporting the industry by not increasing excise duty in an Autumn Budget.

The Association is of the view that the industry is delivering much-needed growth for the UK economy through investment, job creation and rising revenue to the Treasury. But this survey reveals that distillers are investing in growth despite the economic headwinds and rising costs of business.

The industry has shown remarkable resilience, but this cannot be taken for granted. The Autumn Budget must support the Scotch Whisky industry which is a crucial driver of growth in the economy, particularly across Scotland. UK excise duty on Scotch Whisky and other spirits is already one of the highest in the world, calling for no spirits duty increase in the budget. Any such increase would compound the cost of business pressures companies are facing, add at least 95p of duty alone onto every bottle of Scotch Whisky, and further fuel inflation.