Alcohol Duty Tax reform threatens the growth potential of Yorkshire distilleries - Andy Braithwaite
A key component of this is revisions to the rates of duty for all categories of alcoholic products, which are categorised based on their alcohol by volume (ABV) - products falling under higher ABV brackets have received the highest duty increases. These changes have put immense pressure on distillers, but it is ultimately consumers who are paying the price.
At Ellers Farm Distillery, our Dutch Barn Orchard Vodka, with its ABV of 40 per cent, is facing the brunt of the duty increase, along with our popular Y-Gin and a selection of our Small Batch Spirits range. These are premium, award-winning spirits that have been produced to exacting standards and the precise ABV percentages to maintain their distinct characteristics. Making any alterations becomes difficult without potentially compromising on the quality and consumer experience that has won us over 25 international awards for spirits.
Unlike some of the other drinks categories, reducing the alcohol content in spirits is a much more complex decision. As a result, distilleries like ours, which pride themselves on producing premium spirits with specific ABVs, are among the worst affected by these reforms. We cannot simply dilute our products to save on duty costs, as it would undermine the flavour and craftsmanship that goes into each bottle.
The UK remains one of the highest taxed countries for alcohol, and we sit a long way off the likes of our counterparts in Germany for example. Whilst these duty reforms pose a considerable challenge to our business, it is consumers who are ultimately paying the price.
The Yorkshire region, where our distillery is proudly based, has a rich heritage in spirit production and is home to a number of other award-winning businesses. The industry contributes significantly to the local economy, providing jobs, supporting local agriculture, and promoting tourism. The increased duty payments and potential price increases threaten the growth potential of Yorkshire distilleries, and more widely impact the region's economic strength. These reforms may inadvertently encourage consumers to seek cheaper alternatives, potentially leading to a shift away from premium British spirits to lower-priced options. This shift could have a cascading effect on the entire spirits industry, resulting in reduced demand for high-quality, artisanal products and stifling innovation and creativity in the sector. Distilleries may have to look at ways in which they can pivot their offering, but this could come at the detriment of quality and their core beliefs and offering. Here at Ellers Farm Distillery, quality is our number one priority, but sustainability also sits at our heart as a completely carbon neutral distillery from day one. Whilst we would never look to move away from this, I can’t speak for other distilleries.
It is vital that policymakers and industry leaders consider the implications of these duty reforms on businesses like ours.
As we look ahead, we call on the government to engage in constructive dialogue with the UK spirits industry to find solutions that support the growth of distilleries.
Andy Braithwaite is managing director at Ellers Farm Distillery.