Scotland’s MPs and whisky producers are to continue to argue against the introduction of tax stamps after British chancellor of the exchequer Gordon Brown green-lighted them in his recent budget.
And the Scotch Whisky Association said that it would fight the changes on one front while campaigning for financial aid to the Scotch whisky industry if the British Government won’t be swayed.
The SWA fears that the industry will not just be hit by the cost implications of the move but that its implementation will reverse the trend that has seen an explosion in smaller, niche bottlings. This trend has done much to drive the sales of premium whisky and to draw favourable attention to the sector.
The SWA will continue to highlight the ineffectiveness of the measure, designed to reduce wide-scale international tax fraud on spirits sales while working with politicians to ensure that smaller companies would be protected from the negative effects of introducing tax stamps.
The stamps, which cover the top of the bottle and indicate that duty has been paid, are controversial because many think that they are an outdated way of reducing fraud. Some countries have abandoned them.
The trade fears that there will not only be a huge outlay in introducing the technology needed to apply the stamps, but that the need to change the stamp for each different product will make it impractical, particularly for smaller companies, to offer niche expressions of whisky, such as single cask bottlings.
Gavin Hewitt, chief executive of the SWA said: “We are bitterly disappointed that the chancellor has not joined with us and taken advantage of the very real benefits of our alternative anti-fraud package. Tax stamps will impose financial pain on legitimate businesses but will not deter the fraudster.”
But economic secretary to the Treasury John Healey said that despite having worked closely with the Scotch whisky industry in search of alternatives the government had decided that tax stamps were the best way forward.