UK Chancellor Rishi Sunak has announced a set of changes in the budget, to alcohol duties, coming into play 2023. Essentially simplifying the UK’s current 15 tax bands into just 6, based on the principle of “the higher the alcohol content, the higher the tax”.
This has worried a lot of investors, since it would raise the cost of a bottle of whisky by 50p, which for cask investors would reduce the amount of people buying scotch for consumption, potentially leading to lower returns for investors. However, at the last minute, the Chancellor has come to the aid of the UK’s largest food and drinks export market, announcing that the planned duty hike has been scrapped.
This is welcome news for distillers, investors and consumers alike since it helps to assuage fears that the heavy tax burden placed upon scotch whisky was increasing. It shows the commitment the government has to the scotch industry, especially on the back of lifting the US tariffs and the potential of the India trade deal. At the end of the day, typically we fine that the more people drinking whisky, the greater your return on your investment as your cask becomes rarer and rarer.
All in all, the future looks extremely bright for scotch whisky cask investors with the UK government’s commitment to the scotch industry, the global markets opening back up after COVID and numerous countries lowering their tariffs on British goods.
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