Letter: Duty rise on the spirits sector is hard to swallow

Britain does indeed need to gin up its most innovative companies (Opinion, June 28). As the founder of a distillery — and member of the UK Spirits Alliance — it’s good to see our industry as a case study of unleashing productivity through deregulation. But there’s another more recent lesson from our innovative spirits sector — the importance of a stable, fair tax regime.

Last year the government introduced a 10.1 per cent rise in duty (while giving tax breaks to draft beer). This left tax on spirits a third higher than the European average; some 80 per cent of the cost of a bottle of gin is claimed by the Treasury.

The move sucked the energy out of a sector that was, as Gus O’Donnell describes, booming. It saw prices soar. Craft distilleries and pubs, cornerstones of the community, are closing every day. The duty rise contributed to consumers going out less; and with spirits such as gin generating a third of alcohol sales in pubs, restaurants and bars — it heaped more pressure on hospitality. Pubs, after all, are more than just pints.

But perhaps most tellingly — if we are looking at lessons for “increasing growth . . . by generating higher revenues” — the August duty rise resulted in the Treasury losing £108mn in tax revenue in the period August 1 to May 31 compared with the same period the previous year.

Kathy Caton
Managing Director, Brighton Gin
Director, The Gin Guild
Brighton, UK