Artisan gin distillers have joined the Wine and Spirit Trade Association’s campaign calling for a 2% cut in alcohol duty.
The group of distillers argue premium gin is spearheading the drink’s revival, but smaller distilleries are being held back by the “punitive” tax regime. Tax has increased 44% since 2008, they say, and consumers now pay 79% in tax on bottles of gin, the highest tax for any alcoholic product.
Over the last two years, the gin industry has grown by 18%, according to research from the WSTA based on (CGA Strategy and Nielsen) with premium brands up 48% in the same period. Global output is forecast to grow by 13 million litres a year, with most of this growth met by British producers, however smaller producers say they are are struggling to capitalise on the potential.
Christopher Hayman, chairman of Hayman’s Gin Distillers said the cut would have a substantial impact on the 150-year old business. “We are struggling to stay competitive and meet our full potential under a tax regime where UK punters are paying almost three times as much tax on spirits as some of their European counterparts,” he said. “A drop in alcohol duty would allow us to invest in production, staff and keep the historic Hayman’s name alive for generations to come.”
Alex Nicol of Edinburgh-based producer Spencerfield Spirit Company said there were limited opportunities for independent distilleries to invest and the Government needs to listen if it is serious about the potential growth of small gin distilleries.
“We recently invested in a new still and have the potential to grow, but can only really expand if the Government delivers a drop in alcohol duty. Compared to bigger distillers, we must invest a much higher percentage of our capital investment into growing our business which instantly puts us on the back foot” he said.
Tom Warner, director and co-founder at Warner Edwards said smaller businesses were vulnerable to the market and a 2% cut would offer greater security. “The ideal scenario would be to make enough gin to last the year and store it until we sell it. However, duty is owed no later than 30 days from the label application (or once the bottle is sold) so our ability to store large volumes of stock is fairly restricted by the tight leash we find ourselves on,” he said. “It’s difficult to prosper under such tax conditions.”
WSTA chief executive Miles Beale, said it was an incredibly exciting time for the gin industry in the UK, but small, often family-owned companies cannot afford to invest in their businesses under the current tax regime for spirits. “A 2% drop in alcohol duty would lead to industry-wide investment and job creation, allowing this country’s gin companies to get on with what they do best – crafting delicious and creative new gins for us, and for the rest of the world,” he said.
There is still time to get involved in the Drop the Duty campaign which is jointly run by the Wine and Spirit Trade Association (WSTA), Scotch Whisky Association (SWA) and supported by the Taxpayers’ Alliance and Harpers. To email your MP directly with a pre-written letter simply click here. It takes only a few seconds and allows your voice to be heard.
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