Duty escalator depresses sales of Scotch Whisky in its home market

-SWA re-iterates calls for scrapping of the escalator-

Scotch Whisky sales have declined by 12% in the UK over the last five years since the introduction of the alcohol duty escalator.

UK sales volume has dropped from 102 million 70 cl bottles of Scotch Whisky a year in 2007 to 90 million bottles in 2012. At its annual general meeting in Edinburgh yesterday, Scotch Whisky Association (SWA) members discussed the negative impact of the duty escalator and the tax treatment of Scotch Whisky by the UK government.

The duty escalator was introduced in March 2008 by then-Chancellor Alistair Darling, with duty being increased by 2% above the rate of inflation each year. The exception was this year’s Budget when the duty escalator was removed from beer and the beer duty was cut. As a result, drinkers of a dram are now paying 48% more duty than a beer drinker, distorting the alcoholic drinks market in the UK. The SWA described last month’s Budget decision by Chancellor George Osborne as “an unfair and incomprehensible blow to Scotch Whisky”.

Industry members expressed concern that calls for an end to the duty escalator on Scotch have been dismissed by claims that UK tax does not hamper the industry as it sales are primarily overseas.  The UK, however, remains the third most important market for Scotch Whisky producers, accounting for 7% of global sales volumes. Some 80% of UK sales are south of the border.

The SWA is calling for the duty escalator on Scotch Whisky to be scrapped to support, rather than penalise, the industry which boosts the UK economy. The industry supports 35,000 jobs across the UK, many in economically challenged areas.

Gavin Hewitt, chief executive of the Scotch Whisky Association, said:

“Scotch Whisky can only be made in Scotland and is vital to the UK and Scottish economies. It is time the UK Government started treating the industry more fairly in its domestic market. The duty escalator penalises ordinary people at a time of economic pressure, increases the inflation burden, depresses the industry when the Government says it wants to stimulate economic growth and sets an unwelcome tax precedent for other governments to follow in taxing Scotch Whisky exorbitantly. 

“There is no justification for spirits being taxed more heavily than beer. After more than half a decade, the Government should review the duty escalator rather than maintain the mantra that it should run for the remainder of this Parliament.  The escalator will further depress the volume of sales of Scotch Whisky in the UK.”

The 5.3% increase in spirits duty in this year’s Budget led to a 47 pence rise in the average price of a standard 70cl bottle of Scotch Whisky from £12.42 to £12.89. Total tax, including VAT and excise duty, now accounts for 80% of the price of a bottle of Scotch Whisky in the UK.

Of the European Union members states only Ireland, Finland and Sweden have higher taxation on spirits than the UK.

In the five years to 2012 the volume of Scotch Whisky exports has increased by 10% from 1.1 to 1.2 billion bottles a year. Such success overseas in contrast to a decline in sales in the UK shows the detrimental impact of government policies on the domestic market.

For further information please contact Rosemary Gallagher, SWA communications manager on 0131 222 9230/0743 260 5385 email rgallagher@swa.org.uk or Campbell Evans on 0131 222 0231/07768 002 262 or email cevans@swa.org.uk

THE MACALLAN UNVEILS GOLD

 The first release from The Macallan 1824 Series

100% Sherry Casks, 100% Natural Colour, 100% The Macallan

Luxury single malt whisky brand, The Macallan distributed by Maxxium UK, has today unveiled The Macallan Gold, the first expression in The 1824 Series.  Exclusive to the UK*, the new bottling celebrates two of The Macallan’s greatest strengths; oak sherry casks and natural colour.

Matured in sherry seasoned oak casks The Macallan Gold offers a lemon citrus nose accompanied by orange peel and sweetness that softens but doesn’t eliminate the zest.  Burnished gold in colour the single malt has notes of vanilla followed by dark chocolate, with lingering floral and light oak notes.

Bob Dalgarno, The Macallan Whisky Maker commented: “Using colour to drive and define a whisky differs dramatically from the conventional age approach, creating The Macallan Gold allowed us to explore different casks and base our choices on aromas and flavours. The palate is ruled by citrus and boiled sweets along with hints of ginger and cinnamon, while soft oak notes reveal toasted apples.  We have been able to work creatively with the full range of matured stock available, rather than working to a pre-determined character based on age. “

Alongside Gold, The 1824 Series will also include three further expressions, Amber, Sienna and Ruby, to be launched in Spring 2013.  Like Gold, all names reflect the actual colour of the whiskies in the range, but also describe naturally occurring minerals and metals. Grounded in an unwavering commitment to sourcing the very best oak sherry casks, the most expensive in the industry, The 1824 Series showcases the signature style of The Macallan – embracing the defining elements which have made it one of the world’s truly great single malts. 

The casks chosen for the range deliver a gradation of colour from light to dark, with the wood character defining each expression’s flavour, moving from lighter, lemon citrus to richer, dried fruit notes.   As the whiskies become darker and richer, so the pool of casks able to deliver this character becomes smaller and rarer.  

Commenting on The 1824 Series, Ken Grier, Director of Malts, Edrington, said: “As some 60% of the aroma and flavour of The Macallan derives from the oak maturation casks, this new range is a genuine opportunity to demonstrate the critical role of these exceptional casks and also to challenge perceptions about bottling at arbitrary ages.  Taking colour as the basis for shaping these whiskies, an industry first, is testimony both to the innovative approach to whisky making and to the long experience of our Whisky Maker. This truly is Bob’s work at its very best.”

The Macallan Gold will be available at all good whisky specialists, wholesalers and selected multiple grocers from 1^st October, and online for UK customers at www.themacallan.com at a price of £36. 

Peter Sandstrom, Marketing Director, Maxxium UK said: “The Macallan 1824 Series is the perfect combination of two of the most influential factors which make this single malt whisky amongst the most distinctive and desirable, namely oak sherry casks and natural colour. It is testament to our great relationship with Edrington that Maxxium UK is the first market to debut this exciting new product – The Macallan Gold.”

*The UK will be the first market to take the new range with the launch of Gold in Autumn 2012, exclusively for 6 months.  France will follow early in 2013.  The 1824 Series will then roll out in Europe and Canada plus key emerging territories in Central and Eastern Europe, Latin America and Africa from Spring 2013.

Notes to editors: The 1824 Series

The Macallan has unveiled The 1824 Series, a range showcasing two of its greatest strengths; oak sherry casks and natural colour.

Bob Dalgarno, The Macallan Whisky Maker, has created four expressions by identifying the natural colour formed during maturation in different casks types to create the character informed by these colours. The expressions are Gold, Amber, Sienna and Ruby, all names reflecting the actual colour of the whiskies in the range, but also describing naturally occurring minerals and metals.

This innovative approach to whisky making is the first to derive the final character from the natural colours drawn into The Macallan from the oak sherry casks over the years of maturation. It has allowed Bob Dalgarno to assess the broadest range of casks delivering an unrivalled range of natural colours. 

Bob Dalgarno, Whisky Maker, The Macallan, said, “The Macallan world of colour is the true inspiration of the 1824 Series.  Using colour to drive and define a whisky differs dramatically from the conventional age approach, allowing us to explore different casks and take a more flexible approach to our stock.  We have been able to work creatively with the full range of matured stock available, rather than working to a pre-determined character based on age. For me, the key thought in this range is that a great single malt doesn’t need to be 30 years old to taste like a 30 year old.”

By drawing on his broadest range of skills in cask selection, Bob has been unshackled by the need to draw on casks selected first and foremost for their age.  His expert skills ensure consistency through the effective management and selection of the casks which provide the spectrum of natural colour and character essential to The Macallan.

Tasting notes:

Gold – a burnished gold spirit offering a lemon citrus nose, then orange peel and sweetness that softens but doesn’t eliminate the zest. A note of vanilla followed more assertive by dark chocolate – with lingering floral and light oak notes. Citrus and boiled sweets dance on the palate, along with hints of ginger and cinnamon, while soft oak tones reveal toasted apples. The finish is medium sweet, malty and slightly dry. 

Amber – a floral, citrus sweet nose gains presence, commanding a chorus of sweet vanilla notes over freshly harvested grain. Raisin, sultana and cinnamon look on as toffee apples and candy floss step into the limelight. On the palate, fresh green apples and lemons mingle with cinnamon. Ginger notes hover as fruit takes over, with subtle oak lingering. The finale is light to medium, with soft fruits and cereal, slightly dry.

Sienna – a warm opening with a subtle vanilla nose, persistent yet not overpowering. Orange arrives, turning zesty and sharp, though tempering green apples add freshness and balance. Next comes white chocolate truffles, chewy and sumptuous, with elegant oak notes. Dates, figs and raisins lead the palate then make way for nutmeg and ginger with a splash of oranges and apples, before vanilla returns. The final fanfare is gentle, smooth and warming.

Ruby – Spanish Oak piques the nose before reluctantly admitting rich, dried fruits and an edgy trickle of treacle. A hesitant sweetness enters, then oak returns, burnished and mature. On the palate a rush of ginger, nutmeg and resin herald orange, sultana and raisin with their restrained but pervasive sweetness. Clove is here and gone, leaving oak the undisputed maestro. The finish of this ruby-red spirit is long, lingering and reflective.