Newcastle Gin director Harry Vaulkard has urged the Labour Government to tax gin at the same rate as other drinks, warning that high spirits duty is damaging the UK economy. He claimed that by hammering distillers with tax, the Government is collecting less revenue than if the businesses were allowed to thrive.
Tax rises and falling revenue
Mr Vaulkard said: “Since August 2023, spirits duty has risen 17%. The Conservatives added 10.1%. Labour then added 3.65% and 3.66% in successive years. Spirits receipts fell by £94million last year, and revenue now sits £1.1billion below what the OBR originally forecast.”
He described the challenges facing distillers: “For a small distillery like mine, this is not abstract. Every duty rise eats into cash we would have otherwise spent on jobs, expansion, and investment to diversify and grow.”
Call for fairer taxation
Mr Vaulkard attacked the Westminster Government for taxing spirits “more heavily than the Spanish or French governments”, adding: “That’s no way to back British manufacturing. A Geordie on holiday pays less tax on a British spirit abroad than at home.”
He warned that venues, bars and restaurants are also suffering and claimed that draught relief on alcohol duty had “only made things worse” because it “rewards beer and cider, which already have an established route to the pub”.
Impact on gin drinkers
“Today’s bars serve crafted British gin, whisky, rum and cocktails, but the tax system is still set-up in a way that suggests pubs are only about beer,” he said. “Why is it that the G&T gets clobbered? It doesn’t make sense on any level. The average pint of beer holds 2.6 units of alcohol. A single measure of gin in a G&T holds one, but it’s the G&T that gets hit. Costs are driven up for working people wanting to enjoy a drink with friends and gin drinkers are being priced out.”
Setting out his request to the Treasury, he said: “Our ask is simple: bring spirits in line with other categories and cut duty. If history is any guide, the Treasury will make more money too. Gordon Brown froze duty from 1997 to 2007 and revenue rocketed 44%, reaching £2.4billion in 2007. Keeping duty fair for spirits producers means trade grows, and jobs are created. Back British spirits and the receipts will follow.”
Government response
A Government spokesperson said: “The Chancellor has prioritised support for the hospitality industry in his first week in the job when he cut business rates by 20% for pubs, social clubs and live music venues – saving thousands of locals over £1,000 a year. This is on top of providing tax break on poured pints and capping corporation tax.”
