Has Rachel Reeves just dealt a hammer blow to small distilleries by refusing them fair duty relief?

The open letter called for parity with brewers and cider makers, as the existing scheme - limited to products under 8.5% ABV - undermines its goal of supporting small businesses and innovation across the UK drinks industry.

Supporters of the open letter included Elsham Wold Distillery, Wharf Distillery, Doghouse distillery, London Distilling Co, Ludlow Distillery, Grasmere distillery, Spirit of Birmingham, Exploring Whisky and more.

If the Small Producers Relief had been extended to alcohol over 8.5%, this would have meant that small distilleries could offer a locally produced product to customers at a competitive price.

As things stand it is very difficult for them to compete with the big international brands and with locally produced beer and cider.

The current framework unfairly excludes small producers of gin, whisky, rum, and other higher-strength drinks, and the new budget has done nothing to address this.

Combined with the increase in minimum wage and living wage, all distilleries will feel the effects of this budget.

Duty relief for beer and cider has proven its value. It has helped small producers compete with global corporations, encouraged hundreds of new entrants, and driven diversity and innovation.

Extending the same support to spirits would deliver exactly the same benefits - and strengthen the UK’s position as a world leader in craft distilling.

I am disappointed that Rachel Reeves did not even consider our proposal, in favour of continuing with measures that have already been shown to reduce revenue for the government.

Spirits sales now represent 38% of pub alcohol profits according to The Scotch Whisky Association, despite a smaller share of total serves, and over half of consumers report a preference for spirits when drinking out.

Premium and locally made spirits are key to pub profitability and consumer engagement. Giving small distilleries access to duty relief would allow more collaboration between pubs and local producers, keeping value in local communities.

The UK’s duty framework should reward innovation, not penalise it. Including spirits in Small Producer Relief would deliver fairness, drive exports, and strengthen the entire drinks ecosystem - from distilleries to pubs to the Treasury.

Many small spirits producers will also be affected by the changes in business rates, which are increasing for commercial properties worth over £500,000.

Many small businesses are in buildings worth £500,000 or just over. These are not big buildings. These are not enormous distribution warehouses operated by multinationals.

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Liam Hirt is Founder of Circumstance Distillery and Psychopomp Distillery in Bristol.

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