Whisky group calls for 'fairer' duty system in Budget

The government has an early opportunity to start to introduce a "fairer" duty system based on a drink's alcohol content in March's Budget, the Scotch Whisky Association (SWA) has argued.

The controversial proposal, known as "equalisation", would effectively mean a freeze on duty for spirits - and a hike in tax for beer, cider and wine.

But brewers and the pub industry are fiercely opposed to the measure, arguing it would be a blunt instrument and lead to a huge increase in the price of a pint.

Gavin Hewitt, the SWA's chief executive, responding to this week's government proposal to ban the sale of alcohol below the rate of duty and VAT, said: "The next stage should be reform of an outdated duty system so that tax discrimination between drinks categories is removed and consumers are treated fairly whatever drink they prefer.

"The Budget in March offers an early opportunity to begin to introduce a fairer balance in alcohol taxation."

Hewitt said a ban on duty plus VAT was the "right way forward". The group said it has campaigned on this issue for two years, as a "legal way to set a floor price".

It added: "A floor price, where a unit of beer is taxed at 21p and of whisky at 29p, highlights the differential taxation of alcoholic drinks and reinforces the need for a fairer excise duty system, with all drinks taxed on the same basis according to alcohol content."

Diageo, the world's biggest spirits producer, is also in favour of equalisation, which put it membership of the British Beer & Pub Association in jeopardy after its position was made public last August.

It is understood a compromise has now been reached between the BBPA and Diageo over its membership of the group.

Industry lobbying on the Budget begun last week, with CAMRA and Society of Independent Brewers members meeting with Treasury secretary Justine Greening.