UK Chancellor Jeremy Hunt yesterday defended his controversial plan announced in the Budget to increase duty on whisky by 10.1%.
The Scotch Whisky Association (SWA) said distillers were not just livid, but insulted by the move and called for a reversal of the tax hike, which starts from August.
It accused the UK Government of breaking a 2019 commitment to ensure the tax system supports the industry.
But Mr Hunt told the BBC that, in real terms, duty on whisky would be at its lowest level for 100 years.
He said the government would continue to engage with the industry to ensure distillers were "successful and prosperous going forward".
The tax on spirits was last increased in 2017.
Lobby
Scottish Secretary Alister Jack had tried to lobby against the increase, but had not been successful.
He added that it was a "matter of regret" that whisky duty was going up, and was "not what I wanted for the Scottish industry".
Graeme Littlejohn, director of strategy at the SWA, said it was "telling" that the chancellor did not have full support for the measure from his Cabinet colleagues.
The tax burden on the price of a bottle of whisky in the UK would rise from 70% to 75%.
Mr Littlejohn said yesterday: “I have spoken to many distillers in the last 24 hours and they are not just livid, they are insulted by the decision made by the chancellor.”
He said revenue from Scotch whisky and other spirits in the UK had increased by more than £1billion since the previous duty rise in 2017. It was now worth close to £4.5billion in total to the Exchequer annually, the director said, and had "grown faster because of those freezes".
Premium options
Consumers had been switching to more "premium" options in their drinking habits, said Mr Littlejohn.
"They are drinking less, and drinking better, which suits quality premium drinks like Scottish whisky," he added. "That in turn generates more revenue to the Exchequer."
He said that a rise in alcohol duty "of this magnitude" would "inevitably" be passed on to whisky drinkers.
"It is important the chancellor re-thinks this," he added. "Currently, far from reducing inflation, this will be an inflationary measure by increasing the cost to consumers."
Mr Hunt said he had been "working very closely" with the SWA on reforms to the alcohol-duty system, which will mean duty is linked to the strength of the drink.
"We have frozen alcohol duty until August, and then we are bringing in the big reforms that they asked for in terms of a different approach, which will be beneficial to whisky distillers," he added.
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