The UK Spirits Alliance (UKSA) warned a further increase in alcohol tax will harm British businesses.
Distillers are struggling with spiralling costs and are fearful of the impact of the 10.1%increase in duty introduced on August 1, a survey showed.
They fear there will be two tax rises in the space of six months as the Chancellor’s Autumn Statement approaches.
A poll found 54% of distillers said they have either not recovered or only partially recovered from Covid.
A further 70 % fear their ability to invest in business improvements such as production capacity and innovation will be impacted by the increase in duty.
And 43% warn that the rising duty rate will have an impact on their staffing levels.
In its submission to the Treasury ahead of the Autumn Statement, the UKSA, said: “The Chancellor should ensure a fair approach across the industry, and freeze duty on all drinks enjoyed by consumers, rather than simply a beer and a cider pulled in a pub.
“The Brexit Pubs Guarantee (BPG) not only does little to support pubs, bars and restaurants but also penalises adult customers who might prefer a gin and tonic, or a spritz over a beer or a cider.”
The government pledged that the duty pubs and bars pay on these drinks will always be less than retailers, known as the BPG.
It means that the duty they pay on each drink poured from draught, such as pints of beer and cider, will be up to 11p cheaper than in supermarkets.
More than four hundred spirits businesses recently wrote an open letter to the Chancellor Jeremy Hunt warning that just a few months since the inflation-busting increase in August, they are already seeing the impact on their businesses.
The UKSA has written to MPs urging them to visit distilleries or pubs in their constituency this Autumn to hear first-hand how the duty increase is affecting them and their customers
Stephen Russell, managing director of Copper Rivet Distillery in Chatham, Kent, said:
“On top of record interest rates and inflation, the Chancellor hit pubs, distilleries and consumers with a 10.1& hike in duty over the summer.
“At the Autumn Statement, he has the chance to show that he’s on the side of our industry by not repeating his mistake and freezing tax on spirits.”
“The Chancellor’s cavalier approach to the duty regime is pushing up inflation. He still has time to back our thriving British spirits industry by freezing duty.”
