WHAT'S THE CLAIM?
“Thanks to @theSNP, Scotland is one of the most expensive places
in the world to buy Scotch whisky” – tweet from @GlaswegianTory August 31, 2019
DOORSTEP ANSWER
WESTMINSTER – not the Scottish Government – is responsible for the biggest element in the cost of a bottle of Scotch whisky – alcohol duty and VAT worth 72% of the retail price. In fact, many countries in Europe charge even higher taxes on spirits. The Trump administration plans a new 25% tariff on Scotch whisky.
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BACKGROUND
AS of 2018, there were 133 whisky distilleries in Scotland. Scotch whisky is the world’s number one internationally traded spirit, with exports worth over £4 billion annually selling to 175 markets. Products vary in content (malts, grains, blend) and age. So crude blanket statements such as the claim quoted above are meaningless generalisations at best. However, it is possible to make some international price comparisons which easily invalidate the claim.
TAXES ON WHISKY
TAX on Scotch in the UK currently stands at 72%. This means that around £3 in every £4 spent on Scotch whisky in the UK goes to HM Treasury in excise and VAT. Per unit of alcohol, Scotch whisky is taxed more than any other category of alcohol in Britain. For example, tax on Scotch Whisky is 16% more than tax on wine. Clearly this level of tax is set by UK Conservative, Labour and coalition governments and can’t be pinned on the SNP. In fact, only independence would give the power locally to reduce such duty, assuming Scots voted for this.
In March 2017, the then Conservative chancellor of the exchequer, Phillip Hammond, imposed a near 4% increase in duty on spirits, as a revenue-raising measure. As a result, sales fell by one million bottles in the first six months of 2018. This duty increase was in fact opposed by the SNP Government and SNP MPs.
IMPACT OF MINIMUM ALCOHOL PRICING
SINCE 2018, the Scottish Government has imposed a minimum price for alcohol, making it illegal for shops in Scotland to sell alcohol for less than 50p per unit. This was done for health reasons given Scotland’s chronic problems with alcoholism. The effect on domestic whisky prices was limited as the biggest relative impact fell on the very cheapest blended products – after all, that was the intent of the legislation. Asda increased the price of Famous Grouse from £12 for a 70cl bottle to £14. Tesco increased the price of its Scots Club Blend from £11 for 70cl, to £14. For mainstream malt products, which were already expensive as a result of HM Treasury duty and VAT, the proportionate impact of the minimum price was negligible and had no effect on sales.
For the record, even the cost increase for the cheapest supermarket grains and blended products still left Scottish retail prices below the highest in continental Europe – invalidating the claim.
Three continental European economies price alcohol in general and spirits in particular at higher rates than in the UK – this makes imported Scotch whisky dearer than in Scotland (even with minimum pricing, which merely sets a price floor).
WHISKY PRICES OUTSIDE OF EUROPE
OUTSIDE of Europe, other countries tax Scotch whisky even more than in the UK, either to raise revenue or to protect domestic beverage producers. So again, this invalidates the claim that Scots pay an inordinate price for their national drink as a result of actions by the SNP Government.
For instance, the government of India applies a massive 150% tariff on imported Scotch whisky, while individual states add their own regulations, taxes and restrictions. As a result, the minimum retail price of a bottle of Glenfiddich (the world’s best-selling single malt) in India is around 3100 rupees or £35 – and can be a lot more. The current UK Asda retail price for a bottle of 12-year-old Glenfiddich is circa £27 – which makes the Indian retail price around 30% dearer. A bottle of Laphroaig starts at the equivalent of 3500 rupees or £38. The local Asda price in Scotland is around £30.
WHISKY PRICES IN THE USA
AMERICA is the biggest importer of Scotch whisky. It is true that till recently whisky taxes have been relatively low in America. For instance, Johnnie Walker
Red Label blend retails in the US for $22.99 – $24.99 for a 750ml bottle.
The Tesco price is circa £20 per 70cl bottle, meaning that in fact price levels are roughly equivalent. However, last year the Trump administration announced it was going to slap an import tariff of 25% on imports of Scotch whisky, in retaliation for alleged subsidies Europe gives to Airbus.
Scotch whisky has been imported tariff-free to the United States for the last 25 years. If the tariff goes ahead, the retail price of main Scotch brands in America will likely shoot higher than in Scotland.
The Scottish Whisky Association estimates that the new tariff will see exports to the US drop by as much as a fifth.
FACT-CHECK RATING: FALSE
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