A new survey by the Scotch Whisky Association (SWA) has found that nearly 40% of Scotch whisky distillers’ transport costs have doubled in the past 12 months, while nearly a third expect energy bills to increase. Soaring, nearly three-quarters (73%) of businesses expect the same increase in shipping costs. But the sharp increase in costs has not dampened the enthusiasm of Scottish producers to invest in the industry.
Distillery energy costs, transportation costs
and supply chain costs have risen sharply
Energy costs for 57% of distillers increased by more than 10% in the last year, and 29% doubled their energy prices, according to a new survey by trade group Scotch Whisky Association (SWA).
Nearly a third (30%) of Scottish distilleries expect their energy costs to double over the next 12 months. The survey also found that 57% of businesses expect energy costs to rise by a further 50%, with nearly three-quarters (73%) expecting a similar increase in transport costs. In addition, 43% of respondents also said that supply chain costs have risen by more than 50%.
However, the SWA noted that the industry continues to invest in operations and supply chains. More than half (57%) of the distilleries said their workforce has increased over the past 12 months, and all respondents expect to expand their workforce in the coming year.
Despite economic headwinds and rising business costs
But brewers are still investing in growth
The SWA has called on the UK’s new prime minister and the Treasury to support the industry by scrapping the double-digit GST hikes planned in the autumn budget. In his final budget statement in October 2021, former finance minister Rishi Sunak unveiled a freeze on spirits duties. The planned tax increase on alcoholic beverages such as Scotch whisky, wine, cider and beer has been cancelled, and the tax reduction is expected to reach 3 billion pounds (about 23.94 billion yuan).
Mark Kent, chief executive of SWA, said: “The industry is delivering much-needed growth to the UK economy through investment, job creation and increased Treasury revenue. But this survey shows that despite economic headwinds and the cost of doing business Up but still growing investment by distillers. The autumn budget must support the Scotch whisky industry, which is a key driver of economic growth, especially in Scotland as a whole.”
Kent pointed out that the UK has the highest excise tax on spirits in the world at 70%. “Any such increase would add to the cost of business pressures faced by the company, adding a duty of at least 95p per bottle of Scotch and further fuelling inflation,” he added.