| EDINBURGH, March 12
EDINBURGH, March 12 The Scottish whisky industry
described the budget tax rise on spirits sold in the UK as
"punitive" and told the government it was a blow to
international competitiveness at a time of rising exports.
Gavin Hewitt, chief executive of the Scotch Whisky
Association (SWA) said in a statement following British finance
minister Alistair Darling's budget speech that Scottish
distillers were astonished by the tax announcement.
"The government's own figures show that any duty increase on
whisky is likely to reduce revenue at a time when public
finances are tight," Hewitt said on Wednesday.
"A tax rise is a blow to international competitiveness when
the industry has been investing significantly to meet a global
demand for scotch whisky. It sets a damaging precedent that
export markets may follow," he added.
In his first budget, Darling told parliament that alcohol
duty will rise by 6 percent above the inflation rate with beer
up 4 pence a pint, wine 14p a bottle and spirits 55p a bottle.
He added alcohol duties would increase by 2 percent above the
rate of inflation in each of the next four years.
The sale of scotch has soared over the past couple of years
on demand from areas such as China, India, Russia and parts of
South America, and the industry has reacted with multi-million
pound investments in new distilleries. Some 90 percent of scotch
whisky is exported.
The SWA said that while the tax level announced applied to
sales in the UK, it sent "a damaging message overseas". It said
foreign countries defending their own high duties on scotch
whisky would look to the UK tax structure.
It said whisky exports contributed 2.5 billion pounds to the
balance of trade in 2006, which it said represented nearly 25
percent of UK and 67 percent of Scottish food and drink exports.
It added that 65,000 jobs depended on the industry.
The SWA said the 55p duty rise - the biggest since 1991 -
would push the tax burden on a bottle towards 75 percent.
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(Editing by Erica Billingham)