Tory tax rise on spirits 'must be reversed' as one in four pubs know distiller that's shut

Chancellor Rachel Reeves has been urged to reverse a Tory tax rise on spirits as one in four pubs say they know a distiller that's been forced to close

Rachel Reeves has been urged to reverse a Tory tax rise on spirits as one in four pubs say they know a distiller that's been forced to close.

Some 280 distillers have written to the Chancellor to demand she reverses what they say was the Tories’ “disastrous decision” to increase spirits duty by 10.1% in August last year (2023). It comes as a survey of 201 pub landlords across Great Britain shows distillers are disappearing - with 25% of them seeing a distillery which had supplied them close in the past 12 months.

In the letter to Ms Reeves, ahead of October 30’s Autumn Budget, gin, vodka and whisky makers warn her that “the future of this once booming craft distillery sector is at stake”. The industry had already been financially hit by the Covid, with distillers having suffered supply and delivery issues as well as the knock on effect of pubs and bars being shut.

The group, represented by the UK Spirits Alliance, wrote: “The disastrous decision by the previous Government to increase duty on spirits in 2023 by a historic 10.1% not only heaped further pressure on struggling pubs, penalised consumers and drove up inflation – it led to a significant drop in much-needed tax revenue. We recognise your support for the sector, and we urge you to resist repeating the mistake of the previous Chancellor and instead reverse their short-sighted decision in your Autumn Budget.”

New tax changes introduced last year mean the higher a drink’s strength the higher the duty. The letter branded it an “inconsistent duty system that discriminates against spirits”, adding: “Spirits are taxed more per unit of alcohol than any other category, for no logical reason.”

Ben Marston, co-Founder of Puddingstone Distillery in Hertfordshire and spokesman for UK Spirits Alliance, said: “The Chancellor has the opportunity to use the Budget to correct the economic harm caused by her predecessor. Increasing what is already the highest level of duty on spirits in the G7 has been shown not to work."

The Treasury has described the move to tax higher spirits with higher duty as a “common-sense approach”. A Treasury spokesman said: “We do not comment on speculation around tax changes outside of fiscal events.”

::: Survation spoke to 201 pubs in Great Britain between August 26 and September 4.