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Whisky industry calls time on 'unfair' taxation

By Garry McCartney

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Benromach Distillery on Invererne Road is affected by international trade relations, like any other business.
Benromach Distillery on Invererne Road is affected by international trade relations, like any other business.

A LOCAL whisky bottler and distiller has joined national union and industry groups calling for the UK Government to do more to help Scotland's international whisky trade.

Gordon & MacPhail sales director David King has backed the GMB (General, Municipal, Boilermakers) who claim Westminster has repeatedly ignored warnings, leaving the industry exposed, and has joined the Scotch Whisky Association (SWA) in calling for an end to the US whisky tariffs that threaten 22,000 whisky and spirit industry jobs in the UK.

Mr King said: "It’s disappointing that Single Malt Scotch has become caught up in this trade dispute over aircraft subsidies. Along with the rest of the industry, we are monitoring the situation and we would like a return to normal trading practices as soon as is possible. However, there will still be demand from the US for high quality whisky products such as the ones we offer. And while the US is an important market, we export to many countries across the globe and this diversity provides security."

GMB analysis shows Scotch whisky exports were worth £4.7 billion in 2018, however, a 25 per cent tariff was imposed on imports of US whiskey into the EU in June 2018, in response to US tariffs on European steel and aluminium.

In October 2019, the US imposed a 25 per cent tariff on imports of Single Malt Scotch Whisky to the US in the long-running dispute over EU and US subsidies to Airbus and Boeing.

GMB Scotland organiser, Keir Greenaway, claims the UK's Conservative Government has repeatedly ignored GMB's warnings.

He said: "For three years, we have been calling on the Government to bring forward protective measures for our vital whisky and spirits sector but to no avail. It needs to intervene now to mitigate the impact of the previous tariff increases but also to tackle the real prospect of more. It also needs to lay down an important marker for future trade deal negotiations.

"Alongside oil and gas, food and drink manufacturing, with whisky and spirits the jewel in the crown, are the foundations of the Scottish economy but it’s massive value and importance to Scotland is perhaps something that’s lost on Boris Johnson and his Brexit Cabinet. They need to wake up now."

Mr King agrees: "The Scotch Whisky Association has for many years pursued the concept of duty equalisation across all alcoholic beverages and we fully support its position."

The chief executive of the SWA has also called for a negotiated solution to unrelated trade disputes and to remove all tariffs on distilled spirits.

Karen Betts said: "The disputes about steel and aluminium and aircraft manufacture have nothing to do with us, but the tariffs stemming from them are causing needless damage to our industry on both sides of the Atlantic, and to the livelihoods we support. Constructive negotiations must solve trade disputes, tariffs on whiskies will not. Exports each way are markedly down, and if these falls are maintained over the year around £100 million is likely to be lost in Scotch whisky exports. Many smaller whisky companies are now asking themselves how they can continue exporting to the US, whether they can build up alternative markets, and if not how their businesses will cope.

"Until a resolution is found, it is critically important that governments act to mitigate the impact of tariffs on producers, particularly SMEs which are being disproportionately hit. A cut to excise duty in the March Budget would help businesses strengthen their presence in the UK while exports to the US are under such pressure."

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