From The Scotsman, 02-Oct-2003:
Whisky now cheaper in Denmark than Scotland
By William Lyons
DENMARK has given a major boost to the whisky industry by almost halving its duty on Scotch, making it cheaper to buy a bottle in Copenhagen than it is in Edinburgh.
The Danes, who import £9.3 million worth of Scotch a year, have cut the tax by 35 Kroner (£3.25) a bottle in an attempt to curb the volume of lost tax revenue from cross-border shopping with Germany.
Tax on a bottle of Scotch in Denmark is now 5.84 (£4.11) per bottle, compared with £5.48 in the UK.
Welcoming the move, Hugh Morison, chief executive of the Scotch Whisky Association, said: "Denmark has recognised that high taxes only lead to a disorderly spirits market, with consumers crossing the border to Germany looking for a fairer deal resulting in the government losing valuable tax revenue."
That situation could be exacerbated next January when Denmark will be required by the EU to remove its import restrictions for personal consumption.
Morison added: "With Norway reducing its spirits tax in each of the last two years and the Finnish parliament considering a proposal to cut the duty on Scotch by 44 per cent next year, Denmark’s tax cut is part of a welcome trend across Scandinavia towards the fairer taxation of spirit drinks."
Yesterday, analysts predicted the Danish move might give rise to a domino effect. One source said: "By cutting tax in Denmark the pressure now turns to Sweden. There is a bridge between Sweden and Denmark and early rumours circulating are the Swedes will be forced to cut their duty on whisky by 50 per cent."
If Sweden and Finland do cut their duty by early next year we could have a situation where the UK has the second- highest whisky duty in Europe behind Ireland.
Leonard Russell, the managing director of Glengoyne distillery, which supplies 5,000 cases of whisky a year to Denmark, welcomed the news and said the move should help boost sales.
He said: "Gordon Brown should take note that tax on a bottle of whisky in Denmark is now cheaper than the UK."