We must not repeat the Tory mistake of hurting our beloved spirits industry

3 min read28 October

The spirits sector is a great British industry with huge potential. As a pro-growth government, we must help it flourish.

As someone who is passionate about supporting local businesses and investing in our communities, I recently had the pleasure of visiting Castletown Distillery, housed in the heart of my constituency Newcastle-under-Lyme.

Owners Claire and Jay have spent two years perfecting Staffordshire Gin in Silverdale before bringing their operation to the town centre. During my visit, I was able to see firsthand the dedication and passion that goes into each handcrafted bottle they produce.

Small businesses are the lifeblood of our communities, and Castletown Distillery is just one example of a thriving business in the spirits industry. Over the past eight years, this sector has flourished, with the number of distilleries growing from 190 to more than 1,000, supporting over 446,000 jobs and contributing £13bn to our economy. Our iconic spirits industry is not just a symbol of innovation but one of our most promising growth sectors.

However, this growth has stalled due to the previous Conservative government’s decision to increase alcohol duty by 10.1 per cent —the largest hike in over forty years.

Last year’s duty hike was intended to increase revenue for the Treasury. Yet, it has had the opposite effect, resulting in a £298m loss in alcohol duty receipts over the past year. Instead of boosting the economy, the duty increase has created significant financial strain for distilleries like Castletown.

This economic strain has extended beyond distilleries to consumers and hospitality venues across the country. The result? More than half of the public is reducing their visits to pubs and restaurants, with 56 per cent reporting they are cutting back due to affordability concerns.

The hospitality sector is struggling to cope with the impact. Research from the UK Spirits Alliance highlights 16 per cent of publicans have stated that they may not be able to stay open for another year.

The health of our hospitality industry is intrinsically linked to the prosperity of the spirits’ sector. Pubs, bars, and restaurants depend on spirits sales to generate revenue and keep their doors open. In fact, spirits typically provide a higher profit margin per serving than other alcoholic beverages, making them a crucial part of the business model for many establishments.

We have made growth the central part of our mission in government, to fix the foundations of the UK economy and kickstart a decade of national renewal. Promoting productivity and growth in small businesses is key to this, and the British spirits industry is a fantastic example, with businesses starting in kitchens up and down the country now exporting their products across the globe.

It’s clear that the August 2023 duty hike was counterproductive and detrimental to our economy. We must support our local distilleries like Castletown to ensure the continued growth and success of the sector.

Supporting the spirits industry isn’t just about saving distilleries and pubs — it’s about protecting one of Britain’s most successful export sectors, helping spirits’ producers maintain their competitive edge internationally and ensuring that the industry continues to thrive at home.

The previous government’s decision to raise alcohol duty has not only harmed the industry but has also cost the Treasury hundreds of millions of pounds in lost revenue.

By choosing to #BackSpirits, we can support one of Britain’s most exciting and innovative industries and strengthen the UK’s position as a global leader in spirits production, ensuring that our exports continue to make waves on the international stage.

With the right support, the spirits industry can continue to be a driving force for economic growth and a beloved part of British culture.

Adam Jogee is the Labour MP for Newcastle-under-Lyme.

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