Three in four Scotch whisky distillers expect to defer or move investments out of the UK if taxes are raised again in the autumn Budget, according to the Scotch Whisky Association (SWA). 

Since the last Budget on 30 October 2024, the SWA said over 1,000 direct Scotch industry jobs have been lost. 

The association said that the combination of 14% in duty rises over the last two years, alongside US tariffs, has resulted in tough decisions for distillers. 

It added that if taxes are increased again, 76% of distillers warn of a reduced likelihood of capital investment or recruitment. 

One in four distillers also anticipate job cuts directly linked to duty hikes, many of which are in fragile economic areas of the country, including rural and island communities. 

Commenting on industry pressures, Billy Walker, master distiller at Glenallachie said: “I’ve been in the industry for more than 50 years and rarely, if ever, has there been a time of such peril to the long story of Scotch – tariffs overseas coupled with increasing tax and regulation in our home market. 

“Some of the challenges the industry faces the government can’t address, and we accept that. But the high tax burden is something the government can take action on.” 

In advance of the Budget, Mark Kent, chief executive of the Scotch Whisky Association, called for a multi-year freeze on spirits duty.  

This morning (3 September), Kent said: “At her last Budget, the chancellor chose to increase further the duty burden on an industry already weighed down by excessive tax and regulation.  

“Despite that decision, tax receipts have not gone up; and more UK pubs and restaurants have been forced to close. Everyone connected with the hospitality industry knows that pubs, restaurants and other venues cannot survive on beer alone – all rely on spirits for profits. 

“That is why we are calling for the chancellor to announce a multi-year freeze on spirits duty, spanning the lifetime of this parliament; and to ensure that the tax differential with other alcohol categories, which puts Scotch at a competitive disadvantage, does not widen. This would also give respite to the Scottish economy – 70% of all UK spirits are produced in Scotland.” 

The SWA’s message mirrors the All-Party Parliamentary Group on UK Spirits which also warned against a hike in duty on “an industry that is already on its knees”.