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'No reason' for whisky duty rise Budget brings rise in whisky duty
(about 6 hours later)
The Scotch Whisky Association (SWA) has said there is "no good reason" for a rise in duty, ahead of Chancellor Alistair Darling's first budget. The price of a bottle of whisky is set to rise by 55p after the chancellor announced the first increase in duty on spirits for more than a decade.
The industry is bracing itself for what could be the first rise on duty on spirits in 10 years, with reports it could increase by 30p a bottle. From midnight on Sunday, alcohol duty rates will increase by 6% above inflation. Beer will rise by 4p a pint, cider 3p a litre and wine 14p a bottle.
The SWA said it should remain frozen to help towards a fairer alcohol system. The Scotch Whisky Association (SWA) said the rise was "much worse than expected".
It is argued whisky continues to face a disadvantage in the UK, with a higher tax than wine and beer. It was one of the measures outlined in Alistair Darling's first budget.
SWA spokesman David Williamson said: "Duty stability is supporting whisky industry competitiveness." Mr Darling also said that alcohol duties would increase by 2% above the rate of inflation in each of the next four years.
BUDGET WISHESPeople from across Scotland give their views on what should be included in the Budget. href="/1/shared/spl/hi/pop_ups/08/uk_budget_wishes/html/1.stm" onClick="window.open('http://news.bbc.co.uk/1/shared/spl/hi/pop_ups/08/uk_budget_wishes/html/1.stm', '1205256154', 'toolbar=0,scrollbars=0,location=0,statusbar=0,menubar=0,resizable=1,width=500,height=400,left=312,top=100'); return false;" >In pictures Labour are penalising an industry that is the backbone of many communities Stewart Hosie SNP MP
Mr Williamson said distillers were looking to invest to meet growing international demand, so would be keeping a keen eye on Wednesday's announcement. The SWA said a freeze in duty would have helped towards a fairer alcohol system.
He said: "The government has recognised the benefits of a fairer alcohol duty system in recent years and we see no good reason for that policy to change in 2008. It argued that whisky continued to face a disadvantage in the UK, with a higher tax than wine and beer.
"The international evidence is clear that calls for higher duties to tackle alcohol misuse are simplistic and misplaced. Gavin Hewitt, chief executive of the SWA, said distillers were "astonished" by the chancellor's announcement and claimed it worsened the "duty discrimination" against Scotch whisky.
"We agree with the Treasury's long-held view that duty rises are not the way to tackle complex social issues around irresponsible drinking." "A tax rise is a blow to international competitiveness when the industry has been investing significantly to meet growing global demand for Scotch whisky," he said.
"It sets a damaging precedent that export markets may follow."
'Sub-prime budget'
The SWA said it had been braced for a rise in line with inflation, but that a 6% rise over and above inflation meant prices would increase by 9%.
The SNP branded it a "a sub-prime budget from a sub-prime chancellor".
Stewart Hosie, MP for Dundee East, added: "Despite Alistair Darling being the second consecutive Scottish chancellor, we have another budget that is bad news for Scotland.
"The chancellor's extraordinary hike in spirits duty is a backward step for the Scotch whisky industry, a swingeing blow at a time when whisky is already taxed more heavily than any other alcoholic drink.
"Instead of action to tackle the cider-fuelled binge drinking that is the blight of so many communities, Labour are penalising an industry that is the backbone of many communities."