UK gin producers lobby for tax break

12 October, 2021

UK gin producers have called upon Chancellor Rishi Sunak to freeze duty on spirits after revealing that exports have plummeted 35% as a result of the pandemic.

Gin exports reached £332.6 million for the first six months of 2019, but that figure has dropped to just £215 million for the same period this year.

On-trade closures also meant that gin sold in pubs, bars and restaurants has dropped from £1.1 billion in the 12 months to July 2020 to only £647 million for the 12 months to July 2021.

Matthew Gammell, co-founder and head distiller at Pickering’s Gin, said: “We entered into 2020 already feeling the effects from the hesitancy from European export markets with Brexit and then Covid 19 hit the UK.

“The total loss of all travel retail and particularly cruise ships hit us hard, as well as the loss of the on-trade.

“While we are now seeing a return of the on trade there are a lot of businesses that have not survived and those that have survived have changed their buying patterns and are operating much shorter term as there is no confidence yet that they will be able to trade without restrictions.”

The Wine & Spirit Trade Association said that gin has suffered the sharpest decline out of the UK’s top 10 food and drink export categories.

The Treasury is gearing up to deliver its Autumn Budget, and the WSTA is lobbying for Chancellor to freeze spirits duty and extend the VAT cut to alcoholic drinks within the hospitality sector.

“This Budget comes at a crucial time for spirit SMEs who have a long way to go to make up their huge export losses,” said chief executive Miles Beale. “Following the closure of the hospitality sector, in a series of crippling lockdowns, British gin makers who supplied pubs and restaurants both home and abroad saw orders grind to a halt.

Instead of sitting idle, many distillers switched production to make hand sanitiser with many donating batches to the vulnerable and NHS workers.

“When the country needed support, SME distillers were quick to respond. The Chancellor has an opportunity to make a small gesture of thanks by freezing spirit duty in the Autumn Budget.”

The WSTA claims that 73% of the cost of a standard 40% abv bottle of spirits sold in supermarkets is now taken by the Treasury in tax and VAT.

Distillers want to understand why the government insists on taxing the sector so heavily.

Kathy Caton, founder of Brighton Gin, said: “When hospitality closed it in effect shut 90% of our customers overnight. Despite that seismic shock to our turnover, we were totally committed to our community and doing all we could do to help, including switching our production to not-for-profit hand sanitiser effects.

“Eighteen months later, we continue to make the not-for-profit hand sanitiser, and have been able to donate many thousands of bottles to help those in need. For our company to have survived and still be trading sometimes seems like a miracle, particularly with the added pressures of Brexit, supply chains and distribution.

“Craft gin is a massive British success story but needs all the support it can get if it's to keep being such a global success - please help us on our mission to take the Spirit of Brighton to the world and freeze spirits duty.”

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