The cancellation of planned increases to duty on spirits, beer, cider, and wine was one of a number of measures announced by chancellor Kwasi Kwarteng during a speech on Friday. HM Treasury has estimated the freeze will save the consumer £1.35 on a bottle of spirits, 38p on a bottle of wine, 4p on a pint of cider and 7p on a pint of beer.
Nicknamed the 'mini-budget', the economic policy announcement outlined plans from new prime minister Liz Truss and her government to tackle the UK's cost of living crisis. Measures announced include cuts to income tax and stamp duty, and the cancellation of a planned rise in corporation tax.
The freeze on alcohol duty from February 2023 comes after former chancellor Rishi Sunk announced a duty freeze for the sector in his October 2021 budget – marking the longest freeze on the tax for 25 years.
Following the announcement, Scotch Whisky Association CEO Mark Kent said: “The prime minister Liz Truss said that it was important to back the Scotch whisky industry to boost growth, and today the government has delivered.
“The chancellor Kwasi Kwarteng has again frozen duty on Scotch whisky and other spirits, meaning the planned double-digit inflationary increase will now not go ahead. This will save consumers £1.35 on the average priced bottle of Scotch whisky and help the industry as it deals with the dual challenge of rising energy costs and supply chain pressures.
“On behalf of the SWA’s members, I want to thank the government for listening to the concerns of the industry and taking action to support Scotch. The duty freeze will not only support our sector, but the hospitality industry and the wider economy.
“Further action will be needed to bring down the 70 per cent tax burden on Scotch whisky in the UK, which remains the highest in the G7 and one of the highest in the world. We look forward to working with the new HM Treasury team to ensure Scotch whisky can deliver investment, employment and growth in Scotland and across our supply chain.”
Jean-Etienne Gourgues, CEO and chairman of Chivas Brothers, also welcomed the duty freeze. “At a time of rising business and consumer costs, a stable duty regime will help producers, on-trade operators, and households across the country to weather a difficult period. These changes will help to create the right environment for producers to invest long-term, in turn powering exports globally," he said.