By stewartb

The Scotch Whisky Association (SWA) usually has little trouble in having its press statements amplified by BBC Scotland. And the SWA typically has something to say about the budgets of Westminster governments. Anyone seen references to the SWA’s response to the Labour Party government’s budget in a BBC news item: any analysis yet from a BBC business and economy editor? As far as I can see there is still nothing in the Scotland sections of the BBC News website days after the budget. Wonder why?

Now it’s a struggle to avoid displaying a little schadenfreude when it comes to the SWA: I have little empathy for the organisation and its big corporate members. (I restrict my custom to smaller, independent single malt producers nowadays!) Nonetheless, choices of what’s newsworthy or not in the judgement of BBC Scotland’s editors and how they then frame reports are always worthy of consideration.

Below find what the SWA writes about the Budget in a statement entitled ‘Scotch Whisky industry says UK government has broken commitment to ‘back Scotch producers to the hilt’’.

Source: https://www.scotch-whisky.org.uk/newsroom/scotch-whisky-industry-says-uk-government-has-broken-commitment-to-back-scotch-producers-to-the-hilt/

• ‘… the Chancellor’s decision to further increase duty on Scotch Whisky has broken the Prime Minister’s commitment to ‘back Scotch producers to the hilt.’

• ‘The SWA had called on the new Chancellor to take the opportunity to reverse the damage done by the 10.1% increase in August 2023. Instead, the damage done to the industry and to government revenue has been compounded by further increasing the tax burden on the sector, which is already the highest in the G7.’

The Chief Executive of the SWA is quoted: “This duty increase on Scotch Whisky is a hammer blow, runs counter to the Prime Minister’s commitment to ‘back Scotch producers to the hilt’ and increases the tax discrimination of Scotland’s national drink”.

“…  this tax hike serves no economic purpose. It will damage the Scotch Whisky industry, the Scottish economy, and undermines Labour’s commitment to promote ‘Brand Scotland’. She has also increased the tax discrimination of spirits in the Treasury’s warped duty system, and with 70% of UK spirits produced in Scotland, that will do further damage to a key Scottish sector.”

“We urge all MPs who support Scotch Whisky to vote against this duty hike and tax discrimination of Scotland’s national drink.”

A pattern of UK policy volatility

It seems the ‘precious’ Union that the SWA favoured so much during the 2014 independence referendum has hardly delivered certainty and stability for its industry.

September 23 2022: the Scotland business section of the BBC News website had this headline: ‘Mini-budget: How is Scottish business reacting?’. Recall, this refers to the Truss/Kwarteng budget and we know the long lasting negative effects of the economy and on household finances that caused.

But in the article we learn this: ‘The Scotch whisky industry has also raised a toast to the chancellor, after he announced that planned increases in the duty rates for beer, cider, wine and spirits had been cancelled. The Scotch Whisky Association (SWA) said the move would not only support the sector, but the hospitality industry and the wider economy.’

‘Chief executive Mark Kent said: “This will save consumers £1.35 on the average priced bottle of Scotch Whisky and help the industry as it deals with the dual challenge of rising energy costs and supply chain pressures.”

So the SWA welcomed the Truss budget: the merits of that judgement has aged well!

October 18 2022: the Scotland business page of the BBC News website had this headline: ‘Whisky distillers ‘furious’ over duty freeze reversal’. It reported:

‘Whisky distillers have warned that the chancellor’s decision to reverse a planned freeze in alcohol duty will hurt businesses already struggling with soaring costs. The warning came after Jeremy Hunt announced on Monday that the duty would rise in line with retail price index inflation from February. As things stand, that would represent an increase of more than 12%.’

The SWA’s director of strategy was quoted: he told BBC Radio’s Good Morning Scotland programme that the policy change would “dampen” the industry’s ability to invest in the UK and create new jobs. The SWA claimed that many of Scotland’s 141 operating distilleries were “furious” about the reversal. He said: “Predominantly they are SMEs (small and medium enterprises), and they are trying to scale up in the UK market before exporting. This is really going to damage their business plans, this is really going to hamper them from becoming the great exporters of the future.’

August 1, 2023:  the same BBC outlet had this headline: ‘Scotch whisky industry hits out at tax hike’.  It reported that: ‘Scotch whisky industry leaders have hit out at a 10.1% rise in alcohol duty which came into effect on Tuesday. The Scotch Whisky Association (SWA) described the increase as a “hammer blow” for distillers and consumers.It warned that it would make it more difficult for the industry to invest in growth and job creation.’

The SWA’s director of strategy is quoted: “In a further blow, distillers will now face a further competitive disadvantage in pubs, restaurants and bars by being unfairly excluded from tax breaks available to beer and cider.”

You may recall that the SWA argued against Scotland’s independence because it threatened (even temporarily) the ending of EU membership.  Remember this for example:

May 13, 2014: ‘Scotch Whisky Association Fears Independence Impact On Exports’ (https://dev.whiskycast.com/scotch-whisky-association-fears-independence-impact-on-exports/ )

‘In the SWA’s report, (David, now Baron) Frost called EU membership fundamental to Scotch whisky’s success: “We are able to export tariff-free across the single market, use EU to eliminate market access problems, and benefit from the EU’s clout in trade negotiations. … even a temporary interruption of EU involving exclusion from the single market or the customs union, if this were a consequence of independence, would be damaging and difficult to manage.”  

That’s worked out well too!

(See ‘Business influence and a nation’s future: the revealing case of Scotch Whisky, 21 December 2021 at  https://talkingupscotlandtwo.com/2021/12/21/41766/ )

Acknowledgement: the pre-election X/twitter post from the British Labour Party leader reproduced above is used in the SWA’s own press release. A pattern of Labour commitments pre-election being ditched?