Following Rachel Reeves’ pre-Budget speech on Tuesday 4 November, spirits makers have joined forces to ask her to Small Producers Relief to alcohol over 8.5%.
Circumstance and Psychopomp Distilleries founder Liam Hirt has written an open letter to the Government – backed by fellow craft distilleries – in advance of the Autumn Budget on 26 November.
The full list of co-signees to the open letter include:
Liam Hirt - Circumstance Distillery
Richard Foster - Exploring Whisky
Shaun Watts - Ludlow Distillery
Paul Abbott - Grasmere Distillery
Jordan Lunn - West Midlands Distillery
Anthony Dillon - Spirit of Birmingham
Stephen Russel - Copper Rivet
Jordan Morris - Abingdon Distillery
Jared Cave - Integrity Malts
Ben Mordue - Elsham Wold Distillery
Laurence Coinsbee - Wharf Distillery
Matt Kay - London Distilling Co
Karl Bond - Forrest Distillery
Phil McLaughlin - Weetwood
Dan Humphries - Summerton Whisky Club
Amy Seton - Grain and Glass
Tim Ethrington-Judge - Avallen
The open letter calls for parity with brewers and cider makers, stating the existing scheme, which is limited to products under 8.5% ABV, undermines its goal of supporting small businesses and innovation across the UK drinks industry.
Hirt argued the current framework unfairly excludes small producers of gin, whisky, rum and other higher-strength drinks.
Deliver the same benefits
He said: “Duty relief for beer and cider has proven its value. It has helped small producers compete with global corporations, encouraged hundreds of new entrants, and driven diversity and innovation.
“Extending the same support to spirits would deliver exactly the same benefits and strengthen the UK’s position as a world leader in craft distilling.”
The Small Producer Relief (SPR) scheme was introduced to correct structural disadvantages faced by small drinks producers. However, by restricting eligibility to products below 8.5% ABV, it excludes the vast majority of craft spirits, which typically sit at 37.5% ABV or higher.
“This limitation discriminates against distillers and contradicts the scheme’s intended purpose,” Hirt continued. “There’s no public health basis for this exclusion.
“A unit of alcohol in a gin is no more harmful than a unit in a beer. In fact, many spirits consumed with low or zero-sugar mixers have fewer calories than most beers or ciders.
Duty receipts down £700m
“According to recent HMRC data, spirits duty receipts have fallen by up to £700m over the past two years, despite duty increases. A reformed, inclusive SPR could reverse this decline by encouraging investment, compliance and sectoral growth – boosting long-term revenues for the Treasury.”
Spirits sales now represent 38% of pub alcohol profits according to The Scotch Whisky Association despite a smaller share of total serves, and more than half of consumers report a preference for spirits when drinking out.
Hirt added: “Premium and locally made spirits are key to pub profitability and consumer engagement. Giving small distilleries access to duty relief would allow more collaboration between pubs and local producers, keeping value in local communities.”
With the UK craft spirits sector continuing to grow in global reputation but facing mounting tax pressures, small producers say reform is long overdue.
“The UK’s duty framework should reward innovation, not penalise it,” Hirt argued. “Including spirits in Small Producer Relief would deliver fairness, drive exports and strengthen the entire drinks ecosystem from distilleries to pubs to the Treasury.”
