A survey conducted by the Scotch Whisky Association (SWA) found that 57% of distillers have seen energy costs increase by more than 10% in the last year, with nearly a third (29%) seeing their energy costs double.
Nearly 40% of the businesses reported shipping costs doubling in the last 12 months, with 43% also reporting supply chain cost rises of more than 50%.
Rising costs
The survey also found most distillers expect costs to rise further over the next year, with 57% expecting energy costs to go up by a further 50% and nearly three quarters (73%) anticipating another 50% increase in shipping costs.
However, despite rising costs, the industry expects to continue to invest in operations and supply chain. Over half (57%) reported an increase in their number of staff in the past 12 months, with all respondents expecting to need to add to their workforces in the coming year.
The SWA has called on the new Prime Minister and HM Treasury team to commit to supporting the industry by not increasing excise duty in an Autumn Budget.
Spirits duty
It said Scotch Whisky duty sits at 70% due to high rates of spirits duty.
Mark Kent, chief executive of the SWA, said: “The industry has shown remarkable resilience, but this cannot be taken for granted. We are at a critical juncture for many of our members. The Autumn Budget must support the Scotch Whisky industry which is a crucial driver of growth in the economy, particularly across Scotland.
He added: “UK excise duty on Scotch Whisky and other spirits is already one of the highest in the world, and we call for there to be no spirits duty increase in the budget. Any such increase would compound the cost of business pressures companies are facing, add at least 95p of duty alone onto every bottle of Scotch Whisky, and further fuel inflation.”