John Swinney urges U.K. to cut spirits duty in the autumn budget

Scotland’s First Minister John Swinney on Friday urged the UK government to cut spirits excise duty in the Autumn Budget, backing a call from the Scotch whisky industry as producers press for relief from taxes they say are hurting investment, jobs and sales.

Swinney made the appeal after meeting the Scotch Whisky Association’s council of member companies. The industry group has asked the Treasury to reduce duty on spirits in next month’s budget, arguing that Scotch whisky and related businesses are still under pressure after years of disruption in export markets and a recent run of higher costs for companies and consumers.

The intervention places the head of Scotland’s devolved government alongside one of the country’s most important export industries at a key point in the UK budget cycle. While alcohol taxation is decided by the UK government in London, the Scotch whisky sector carries major weight in Scotland’s economy, with distillers, farmers, logistics firms, bars, restaurants and tourism operators tied to the trade.

In its budget submission this week, the Scotch Whisky Association said spirits producers across the UK want the government to lower excise duty. The group said 70% of all spirits produced in the UK are made in Scotland and that hospitality businesses depend on spirits for more than 38% of their total profits. It also said the current alcohol duty structure places a heavier burden on spirits than on other drinks categories.

According to the association, excise duty on spirits has risen 17% over the past three years. The group said that increase has come at a time when the sector has been dealing with more than six years of instability in overseas markets as well as broader cost pressures at home. It argued that the current system taxes Scotch whisky and other spirits at rates up to four times higher than beer, cider and wine, a gap it described as unfair and damaging.

Swinney echoed that argument after hearing from large producers and smaller distillers. In a statement released after the meeting, he said Scotch whisky is central to Scotland’s culture, economy and international identity and that the industry supports thousands of jobs. He said duty increases had put undue pressure on producers and that he was joining calls for the UK government to address what he called an unfair system.

The First Minister’s comments are the latest sign of coordinated pressure on Westminster from Scotland’s whisky makers ahead of the budget. The industry has been pushing the case that a tax cut would not only help distillers but also support a wider supply chain that begins with grain growers and extends to transport firms, packaging companies, pubs, hotels and tourist sites.

The association said improved market access this year in major destinations including the United States and India has created a better backdrop for exports. Industry leaders say that progress could help the sector recover and grow after a difficult period, but only if domestic policy does not erode those gains. Their message to the Treasury is that better export conditions alone will not be enough if tax policy at home remains restrictive.

Mark Kent, the chief executive of the Scotch Whisky Association, said support from the Scottish government matters because the industry reaches far beyond distilleries. He said a duty cut would give producers room to plan, invest and expand, and would also help protect employment. Kent also linked the case for lower duty to broader economic growth in Scotland and the rest of the UK.

The industry’s argument comes at a time when governments in the UK are under competing pressures. Producers want tax relief to spur activity and ease pressure on consumers, while the Treasury must weigh those requests against public finances and health concerns tied to alcohol policy. The Scotch Whisky Association said recent duty increases have not delivered the revenue gains the government may have expected, though that claim was made in the group’s own budget submission.

For Scotland, the issue carries political as well as economic significance. Scotch whisky remains one of the country’s best-known products abroad and an important symbol of national identity. That gives the sector an influence in public debate that goes beyond its direct financial impact. Swinney’s appearance alongside the association’s council reflects that status and signals that his government wants to be seen as an active supporter of the trade even though it does not control the tax in question.

The call also arrives as hospitality businesses continue to face a difficult trading environment. Bars, restaurants and hotels have argued that higher input costs and cautious consumer spending have squeezed margins. By tying the case for lower spirits duty to the health of hospitality venues, the whisky industry is broadening its argument beyond distillers and export earnings to everyday businesses across Scotland and the UK.

No decision has been announced by the UK government on whether spirits duty will be reduced in the Autumn Budget. The budget submission from the Scotch Whisky Association is now part of the lobbying effort aimed at shaping that decision before the chancellor presents the government’s tax and spending plans next month.

Swinney had also voiced support for the sector earlier this year during a visit to the Isle of Harris distillery, where he said the Scottish government would continue to stand up for the whisky industry.