£1 tax on whisky could hit jobs in Leven

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A PROPOSAL to boost Scotland’s coffers by imposing a £1 tax on each bottle of Scotch Whisky has been slammed by Levenmouth’s biggest employer.

Global drinks giant Diageo – the UK’s leading player with almost a 40 per cent share of the market – claims the move would “deeply damage” its local operations at Banbeath and Cameronbrig Distillery.

The firm made a cool £3 billion profit last year but in the ‘Scotched Earth’ TV programme aired last week, economic advisor Professor John Kay claimed the benefits for Scotland were “disappointing”.

Tax plan

He proposed a tax of £1 on the production of each bottle could boost Holyrood by at least £1bn.

Professor Kay said: “The largest producers are not based in Scotland.

“Their profits go mostly to people who are not resident in Scotland.

‘‘They don’t pay much tax in Scotland, and we don’t think they pay much tax in the UK.”

Diageo has invested more than £200 million in Fife over the past three years.

It spent £91 million on expanding Banbeath, creating 400 new full-time jobs.

During peak periods, 1500 people are employed by Diageo in Levenmouth.

The firm’s spokeman said: “The suggestion of a production tax on Scotch whisky is potentially deeply damaging to the industry and to the prospects for investment and growth in the future.

“Scotch whisky is part of a fiercely competitive global market place and anything which adds to the cost of production will damage its competitiveness and harm its long term prospects.

Damage to growth

‘‘Anything which damages the growth of Scotch whisky will also jeopardise the investment which is being made in Scotland and the jobs it creates.”

Gavin Hewitt, Scotch Whisky Association chief executive, said the national drink was contributing more in productivity than the City of London.

It was “ludicrous” to tax a product and potentially stifle a market which had become one of Scotland’s few economic success stories, he commented.