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September 1, 2022

Scotch makers urge Government support amid rising costs

Distillers say they are feeling the sting of increasing energy and supply chain costs.

By Conor Reynolds

The Scotch Whisky Association is calling for Government support and a favourable autumn budget as studies suggest distillers costs could double in the next year.

A survey conducted by the Scotch Whisky Association found that 57% of distillers have experienced increased energy costs of above 10% in the last year. While roughly a third (29%) have responded that their costs have doubled.

Distillers have little confidence that costs will go down and a majority of them (73%) believe that shipping prices will increase further by up to 50%. Yet despite the anticipating of rising costs, roughly half of businesses in the industry surveyed have reported increased staff levels in the last year, and many have stated their intention to invest in operations and their supply chains.

The Scotch Whisky Association is calling on the HM Treasury and whoever the UK’s new prime minister will be, to support the industry by not increasing the excise duty on whisky in the Autumn budget.

Scotch Whisky Association CEO Mark Kent said: “The industry has shown remarkable resilience, but this cannot be taken for granted. We are at a critical juncture for many of our members.”

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, and we call for there to be 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.”

The value of Scotch exports in 2021, which totalled GBP4.51bn ($6.11bn), was up by 19% in comparison to 2020, but they have still remained far from pre-pandemic levels.

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