As a champion of micro-distillers, their small businesses and the incredible and innovative spirits they are creating, we here at the Craft Gin Club are huge proponents of reducing the tax and duty burden for these distillers, a burden that we’ve shown already composes over 60% of the price of a bottle of gin.
The Scotch Whisky Association in conjunction with the Wine and Spirits Trade Association successfully lobbied the Treasury to reduce the burden on all spirits by 2% during this spring’s budget negotiations, a welcome step. Still, the budget refrained from taking into consideration reduced rates for micro-distilleries, unlike they’re micro-brewery counterparts that have enjoyed reduced rates of up to 50% depending on the volume of their production.
With 65 new applications for distillery licenses in the year to March 2015 - 20 more than the previous five years combined - and the government declaring that the UK gin market has the potential to rival the Scotch whisky market which contributes over £4 billion to the economy every year, reducing the burden on these entrepreneurial spirits makers only makes sense, especially in the early stages of their business when they need all the capital they can get to grow their business.
Now, the European Commission is investigating whether changes in the current excised duty system for small and home distillers and brewers are warranted. The primary reason for this investigation according to the Commission is to curb the rise of counterfeit alcohol and tax fraud, both of which can be directly linked to the high duties and taxes that according to the WSTA can compose up to 80% of a bottle of spirits.
Another of the Commission’s objectives is to explore “common reduced rates” for micro-producers of alcoholic beverages with the Commissioner for Economic and Financial Affairs, Pierre Moscovici, stating the EU body would like to “look at ways to lighten the burden for our smaller producers.” If the Commission were to find that a common law for micro-distillers and brewers would benefit consumers and producers, they would modify the Alcohol Excise Structures Directive, a law established over twenty years ago.
We welcome the Commission’s study and will continue to urge lawmakers in the UK to reduce excise duties for micro-distilleries. The results would be a huge boon to the burgeoning industry.