Wednesday, April 21, 2021

UK’s distillery boom continues despite COVID

COVID-19 has failed to put the brakes on the UK’s distillery boom, new figures show.

New HMRC figures show a record number of distilleries were registered in the UK in 2020 – growing by over 100 in 12 months – for the first time.

Bold investors have chosen to take the plunge and launch new spirit businesses across the country, despite the restrictions of the pandemic and closure of the hospitality sector.

The latest data shows that the number of UK distilleries grew by 124, up 28% on 2019, doubling the number of UK distilleries in four years.

Remarkably, the number of distilleries in England has almost tripled since 2016, which was the same year that the gin boom helped the number of English distilleries overtake Scotland for the first time.

England’s distillery numbers have topped 300 for the first time, with 311 registered distilleries in 2020. Scotland has increased its number of distilleries to 214, and Wales and Northern Ireland saw distillery numbers grow too.

The total number of distilleries registered in the UK in 2020 grew to over 560 (at least 563)*, up from over 440 (at least 441) in 2019.

Despite record growth, 2020 has been the hardest year for so many of the UK’s distillers, the majority of whom are small, independently owned businesses.

The Wine and Spirit Trade Association (WSTA) is urging the Government to back the brave army of distillers, who are taking a risk and ploughing their cash and efforts into businesses at a time of such uncertainty, and to ensure that the UK remains the world’s biggest spirit producer.

The WSTA is calling on the Chancellor to continue to nurture the distillery boom by cutting duty and extending the hospitality VAT cut, so as to include alcoholic drinks, at the upcoming Budget on 3 March.

A duty cut will offer some rare support to the UK’s spirit businesses, protect future income to the Treasury, and support a quick and sustainable recovery for the UK’s hospitality sector – in which wine and spirits supply chain businesses will play a key role.

Much of 2020 saw pubs and bars across the country operating with restrictions or shut completely as measures to curb the spread of Covid-19 were introduced.

Pubs and bars operate as the shop window for many distillers’ products and the UK’s growing number of distilleries stand ready to play a vital role in the hospitality sector’s recovery in 2021.

For this reason, the WSTA is also asking the Chancellor to extend the current VAT reduction across hospitality venues, until at least March 2022, and to broaden the scheme to include alcoholic drinks.

“It’s heart warming to find a positive story from the gloom of 2020 – and our bold and growing band of distillers have delivered once again. The record number of new distilleries opening across the UK is great news and helps provide jobs and a real boost to local economies,” said WSTA Chief Executive Miles Beale.

With such a difficult 2020 behind us and a daunting challenge to recover in 2021, our distillers need the support of the Chancellor at the upcoming Budget.

“A freeze at the last Budget certainly helped distillers to invest and grow, but we need the Chancellor to go further this time, with both a duty cut and an extension of the VAT reduction in hospitality venues, until at least March 2022 – and including alcoholic drinks.

“Distillers across the UK will play a vital role in 2021 and beyond as hospitality begins to open up again, and by showing his support for distillers at the Budget the Chancellor can also promote the hospitality industry as it rebounds from COVID-19 restrictions.”

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