WHISKY sales in the UK have plummeted after Chancellor Philip Hammond hiked excise duty on a bottle by 36p in March’s Budget.

Official figures show 36.7 million bottles were released for sale in the first six months of 2017, down by one million from the same period in the previous year.

The figures, taken from HM Revenue and Customs, also show the move has been counter-productive, with overall tax take from spirits falling since the Budget increase.

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Spirits revenue dropped by more than seven per cent in the first financial quarter of 2017/18, down to £697 million compared to £751m in the same period from April to the end of June the previous year.

In 2016, when excise duty was frozen, there was a seven per cent increase in spirits revenue, boosting the Treasury’s coffers by £229m.

A two per cent cut in spirits tax in 2015 led to a four per cent rise in revenue, a £124m increase.

The Scotch Whisky Association (SWA) will today launch a campaign called Drop the Dram Duty, urging Hammond to cut tax on spirits when he delivers his Autumn Budget on November 22.

According to the SWA, the Chancellor’s 3.9 per cent increase, means that the price of an average bottle of Scotch is now 80 per cent tax.

For a bottle costing £12.77, £8.05 in excise duty and £2.13 in VAT will go to the taxman.

Karen Betts, Scotch Whisky Association chief executive, said: “Philip Hammond’s damaging 3.9 per cent spirits duty hike has hit UK demand for Scotch and seen less money going to the Treasury.

“The Chancellor should use his November Budget to Drop The Dram Duty and boost a great British success story.

“Cutting tax would send a strong signal that the Government believes in a world-famous UK manufacturing industry which supports 40,000 jobs and plays a key role in Scotland’s economy.”

When Hammond announced the excise duty rise in the spring, Charles Ireland, drinks giant Diageo’s general manager Great Britain, Ireland and France, predicted it would lead to a reduction in tax revenue.

He says the Government needs to do more support the drink. Ireland said: “Scotch is the heart of our business. We want it to prosper both at home and abroad.

“This week, we announced we are bringing Port Ellen and Brora distilleries back to life, which is a further testament to our desire to nurture and build Scotch.

“We believe consumers in the UK are being taxed unfairly and are calling on the UK Government to support Scotch domestically and as an iconic export.”

MP Hannah Bardell, the SNP’s international trade spokeswoman said: “These figures are deeply worrying, but hardly surprising given the Chancellor’s completely unjustified and damaging hike in duty in March. Demand has slumped because of his actions and Philip Hammond is now getting less into the Treasury coffers because of it.

‘’He has to listen to the calls to reverse his decision in next month. This is all before we even factor in the possible catastrophe of a no-deal Brexit and we can only imagine what that might bring to Scotland’s food and drink sector.’’

The Treasury pointed out that more than 90 per cent of Scotch whisky is exported, and that companies don’t pay alcohol duty on those sales.

A spokeswoman said: “We recognise the importance of the Scotch whisky industry. In the UK, tax on a bottle of Scotch is 90p lower now than it would have otherwise been, thanks to duty freezes and cuts introduced in the last three years.”

Recent research by the SWA says the sector directly contributes more than £3.2 billion to the Scottish economy, and accounts for 60 per cent of the entire food and drink sector.

Employment associated with Scotch whisky in the UK is just below 40,200, with most of those jobs in Scotland.