The Scotch Whisky industry has warned Chancellor Rishi Sunak he could severely damage more than 1,700 businesses across the UK if he hikes up spirits duty in the Budget.
Firms in the supply chain are reliant on distilleries, which have been hammered by one of the highest excise duties in the world, to fill their order books.
Many are already suffering from the downturn caused by a combination of a US tariffs and the Covid-19 pandemic, which saw exports of whisky fall by £1.1 billion in 2020.
Businesses including bottle manufacturers, farmers and freight companies say they face further misery if excise duty is increased next month.
Graeme Littlejohn of the Scotch Whisky Association said: “The Chancellor has said he can’t protect every business and every job.
“But he can prevent hundreds of businesses across the country suffering further harm and financial hardship by backing the industry in the budget. The impact of a duty increase would be felt the length and breadth of the UK.”
Excise duty on Scotch is currently one of the highest in the world, with 70% of the cost of a bottle claimed by the taxman.
British spirits firm bosses have already said they could hire more staff if excise duty is cut, as the country faces its highest unemployment levels in decades.
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.
In last year's Budget, the Chancellor announced that all alcohol excise duties would be frozen. This helped avoid an extra burden on the drinks industry and consumers during subsequent lockdowns.
Ministers have announced a review of alcohol excise duty, but the findings are expected to be delayed because of Brexit and the pandemic.
