Roy Beers: Scotching the myths about the great whisky duty scandal

Related tags Scotch whisky industry Scottish national party Scotch whisky Whisky Scotland

But it has logically and without exaggeration detailed exactly what the budget increase on Scotland's best-known export means for the Scotch whisky...

But it has logically and without exaggeration detailed exactly what the budget increase on Scotland's best-known export means for the Scotch whisky industry, without any outspoken outrage.

Perhaps sensing an open goal, by contrast, Scottish National Party finance Minister John Swinney has gone straight for the jugular, because of course his position demands that he play Punch to HM Government's Judy.

This "punitive" tax increase across the board will damage the Scotch whisky industry (estimated 65,000 employees), he complains, and "give licence to international competitors to raise tariffs on Scotch whisky."

Put bluntly a bottle of Scotch will go up by 55p, should I - a Scotsman - decide to walk to the offie five minutes away and buy a bottle.

Swinney's argument is quite subtle, in some respects. He says the hike is "a money-making scheme" (implying it has little to do with concerns about drink consumption) that "just increases duty on everything from the cheapest cider to the highest quality malts."

He then adds that none of this will "get to the heart" of the binge drinking problem.

He's really implying that certain types of booze are inherently less of a problem than others: if not a broad brush duty hike, then does he advocate selective taxes for particular products, based on the idea that they are abused less often and/or are important to the economy?

We all know that the sort of cheap cider he refers to is rank, but the bottom end of the whisky (and whiskey) market isn't exactly edifying either. Likewise vodka.

Unfortunately Swinney's argument also runs completely contrary to what his SNP cabinet colleague has been saying so loudly and for so long.

Justice minister Kenny MacAskill - amid all the concern for the whisky industry - has been repeatedly stressing the need for an end to cheap booze for at least two years, and has made many bellicose (and often well-received) statements about how he intends to tackle Scotland's drink-related health crisis.

Feisty Glasgow MSP's Pauline McNeill (Lab) and Sandra White (SNP) recently tied themselves in knots during a Newsnight Scotland argument about whether whisky duty (as opposed to that on any and all other booze) should go up, down, or stay the same.

How do you maintain a tough stance on price controls (increasingly the political norm) but argue one particular variety of strong spirit should be given special protection? Or, if you're Scottish Labour, how do you argue duty on Scotch needs to go up? Not exactly a vote-winner on the home turf.

Nobody had briefed either lady on these conundrums and consequently, as they say in Glasgow, neither "had a Scooby": sticking doggedly to routine criticism of the other party was the only strategy they could adopt to get to the end of the interview without looking completely inept - these political rivals were practically in cahoots.

But in fact you could make a special argument for whisky. You could chart the historic levels of tax which have taken the base line to the present ridiculously punitive level - and ask yourself what other "native" spirit anywhere in the world is milked to such a farcical degree by its government.

In that historic context the sudden tax surge after such a long freeze represents a considerable problem at an unhelpful time for the industry: opportunity for export abounds, but costs are rocketing. This in turn inhibits development, and lowers expectations of returns.

You could also add quite a bit to Swinney's general contention that the duty increase (across the board, not just on whisky) won't affect binge drinking.

The supporters of duty increases (including many doctors) appear to imagine that the extra cost is bunged directly on to the retail price of every bottle in the country.

In fact in today's world of booze loss-leading by supermarket empires aiming to win customer share it's quite possible for duty to go up 55p but for the price of a bottle to fall by the same amount.

A deep-discounting retailer makes the calculation that "giveaway" booze earns major dividends by luring in customers for wider spend. Less is more.

So drink may not get noticeably dearer in the multiples, or not immediately, but it will be a different story in the on-trade and in independent grocers. The special bottle of malt somebody might occasionally buy for a birthday present has suddenly become just a little more unaffordable: the end of the market that is completely harmless will take a pointless hit.

You might see some good-going Highlands-style whisky pubs (generally serving quarter-gill measures) keeping any rises very low while compensating elsewhere - another few pence on a dash of lemonade?

It can be demonstrated in any of a dozen ways that any claim the duty rise is linked to a desire to tackle binge drinking is complete nonsense: between the multiples here and the really big off-sales in Calais (etc) I'm convinced there will still be reliably plentiful supplies of cheap booze.

What if Scotch had been treated as a special case? The whisky industry would have been pleased, and the SNP unable to criticise so effectively - but it's hard to imagine the makers of all the other spirits being terribly thrilled.

From Gordon Brown's perspective, too, it could just be that it wouldn't look too great for a Scotsman so determined to appeal to Middle England to be seen to conspicuously single out a Scottish product for special attention.

The man in the street inevitably takes a strictly pragmatic view: fags, booze and petrol - commodities very important to many an average person's quality of life - are being clobbered by the government. It's what governments do, and will be largely forgotten in a month or two.

Related topics Beer

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