Whisky - UK (2020-05)

MYTHBUSTERS

CHRIS MIDDLETON

Issue 167 | Whisky Magazine 15

RIVERS OF GOLD AND BLOOD

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I

n Britain, the development of

commercial breweries in the

17th century took ale production

out of the home, making it easier for

Government to monitor and collect

tax at consolidated brewing locations.

On the heels of breweries, distilleries

became an even more valuable revenue

•–”‡ƒǤŠ‡‡ƒ…–‡–‘ˆ–Š‡β‹”•–

alcohol tax on the domestic production

of ale was in England during May 1643,

spirits followed in 1663 with a tax

on aqua vitae, gin and compounded

English brandy made from malt spirit.

Taxes on spirits were the largest

revenue source for English-speaking

Governments until the 20th century.

The manufacture of high-proof spirits at

large scale premises made the reporting

or gauging through every step from

production, bond store withdrawals

to retail sales accountable to the

half-gallon. Even today, spirits pay

disproportionately higher tax rates than

beer, wine or cider in most countries.

Two hundred years after distilling

entered Europe, Frankfurt-on-Maine

‹–”‘†—…‡†–Š‡β‹”•–•’‹”‹–”‡‰—Žƒ–‹‘•

in 1360 to control unruly drunkenness

induced by the local schnapsteufel,

–Š‡•’‹”‹–⋇†Ǥ•–‡”†ƒ‹ͳͶͻʹ

‡ƒ…–‡†–Š‡β‹”•–…—•–‘•‡š…‹•‡‘

shipments of brandwijn from France

and Germany. The word excise comes

from the Dutch excijs to tax. The English

ƒ”Ž‹ƒ‡–‹–”‘†—…‡†–Š‡β‹”•–†‹”‡…–

tax on local ‘aqua vitae and strong

waters’ from December 1663 to fund

military expenditure and to pay down

the accruing debt left from the English

Civil War (1643 – 1651). Preceding the

liquor excise, the Government began

taxing malted barley, the raw material

for making ale and malt spirits from

’”‹Žͳ͸ͶͶǤŠ‡…‘––‹•Šƒ”Ž‹ƒ‡–

duplicated the English 4d per gallon

duty on aqua vitae in January 1664.

Once Governments discovered

this lucrative revenue stream, they

regularly tapped into it by increasing

rates of excise and customs duties

and added fees for distillery licences

from 1688. These rivers of gold helped

underwrite nearly 200 years of wars.

Between wars, to feed the ambitions of

empire and improve living standards,

Parliaments continued to tax liquor.

They also enacted extra duties on the

raw materials targeting malted grains,

molasses imports and corn taxes

further enriching the Exchequer’s

…Š‡•–ǤŠ‡–Š‡‡”‹…ƒ…‘Ž‘‹‡•

won their War of Independence

ƒ‰ƒ‹•–”‹–ƒ‹ǡ–Š‡β‹”•–”‡ƒ•—”‡”

Ž‡šƒ†‡”ƒ‹Ž–‘‡ƒ…–‡†ƒ–ƒš‹

—‡ͳ͹ͻͳ‘™Š‹•›ǡ”—ƒ†ˆ”—‹–

brandy to pay down the mounting

$52.8 million debt to France and

‘ŽŽƒ†ǤŠ‡†‡„–’ƒ‹†ǡ‘‰”‡••

abolished spirit duties until the War

of 1812 against Britain when duties

recommenced from December 1814.

The War won, taxes were removed

in December 1817 until the Civil

War forced Congress to legislate the

‡˜‡—‡…––‘‡“—‹’–Š‡‹‘”›

ˆ”‘

—Ž›ͳ ͅ͸ʹǤŠ‡‘ˆ‡†‡”ƒ–‡–ƒ–‡•

Ž‡‰‹•Žƒ–‡†Ž‹“—‘”–ƒš‡•‹’”‹Žͳ ͅ͸͵Ǥ

ˆ–‡”–Š‡‹˜‹Žƒ”ǡ–Š‡

‘˜‡”‡–ǡ

•‹‹Žƒ”–‘”‹–ƒ‹Šƒ†„‡…‘‡β‹•…ƒŽŽ›

addicted to spirit taxes.

The Western world’s focus in

–Š‡Žƒ–‡ͳͻ–Š…‡–—”›•Š‹ˆ–‡†ˆ”‘

national defence into a euphemistic

war against intemperance by

prosecuting social policies to limit

access and consumption of alcohol,

leading to countries introducing

draconian prohibitions and limits on

the manufacture and sale of liquor.

The enemy was public consumption.

Ironically, it was the massive costs

of the First World War that relieved

the public’s tax burden on liquor as

Western Governments legislated a new

suite of taxable domains. Governments

introduced personal income and new

company taxes, plus a raft of protective

tariffs, levies, duties and ad valorem

–ƒš‡•–‘β‹ŽŽ”‡ƒ•—”›…‘ˆˆ‡”•ǤŠ‡•‡‡™

taxes reduced the ‘stimulant’s or ‘sin

taxes’ (liquor and tobacco) share of the

”‡˜‡—‡ˆ”‘͸Ͳ’‡”…‡–‹–Š‡ͳͻ–Š

century, to around 25 per cent before

the First World War, to now where

it’s less than half a per cent of most

ƒ–‹‘ƒŽ”‡˜‡—‡•ǤŽ…‘Š‘Ž–ƒš‡•ƒ†

tariffs are still small monetary levers

that Governments use to raise small

quanta of revenue, engineer social

programs and now punish foreign

Governments in trade disputes. In

the 21st-century whisky tariffs are

Ǯ™‡ƒ’‘‹•‡†ǯƒ•’ƒ™•–‘⋉Š–‘†‡”

trade wars in Europe and China.

After the Civil War,

the US Government

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