Slash alcohol duty and we’ll spend cash saved on hiring, UK spirits firms tell Chancellor as Budget approaches

British spirits firm bosses have said they could go on a hiring spree as the country faces its highest unemployment levels in decades - if the Chancellor slashes alcohol duty his upcoming Budget.

Trade body the UK Spirit Alliance, a coalition of more than 260 distillers, said on Wednesday that its latest poll of members suggests that 79% of firms would spend money saved on alcohol duty on hiring new staff.

Latest figures show the UK is now home to 563 distilleries, which the alliance says leaves the potential for more than 1,000 jobs to be created.

Current spirits duties sees £28.74 paid per litre of pure alcohol - so a 40% ABV bottle of gin would face £11.50 in alcohol tax.

Just 14% of business owners surveyed said that if Rishi Sunak did slash the duty in his Budget on March 3, they would put cash saved towards new product investment rather than hiring.

Unemployment has raced past 5%, putting pressure on the Chancellor to provide more financial relief. Mr Sunak is also under pressure from business leaders from across hospitality, retail and cultural sectors to use the Budget to offer offer longer-term certainty to bosses, and help the sectors recover, by extending support schemes including business rates relief and VAT cuts into 2022.

Analysts say many workers are in "zombie" jobs supported only by furlough schemes. Once they end, unemployment, already at a five-year high, will soar further.

A UK Spirits Alliance spokesperson said: “Spirits producers up and down the UK are desperate to grow their businesses, and it’s really encouraging to see producers are overwhelmingly supportive of investing even further to create new jobs.

“We’re calling on the Chancellor to back spirits in the upcoming Budget, allowing our members to hire more staff and drive further investment into our iconic industry, as well as generating bigger receipts for HM Treasury.”

It comes amid a boom in UK spirits consumption, and after the number of distilleries in Britain reached a record high in 2020.

Latest HMRC figures show that 124 new distilleries were established last year despite the pandemic - up 28% on 2019. The total number of British distilleries has nearly tripled since 2016.