Higher prices for drink 'will have serious impact' on jobs

Sir Ian Good, chairman of Famous Grouse maker Edrington, says plans to raise alcohol prices are 'ill-conceived' Picture: Graeme Hart

SCOTTISH Government plans to impose a minimum price on alcohol will have a "serious impact" on 40,000 jobs in the drinks industry, the head of Scotland's largest privately owned whisky company has warned.

Sir Ian Good, the chairman of Famous Grouse maker Edrington, gave the jobs warning as he attacked ministers' "ill-conceived" plans to use price rises to reduce alcohol consumption in Scotland.

Writing in his group's annual report, published yesterday, Good argued: "Politicians in Scotland have been eager to grab headlines with ill-conceived measures which they believe will reduce consumption."

But Good argued that the SNP government's plans to introduce a minimum price of up to 40p per unit of alcohol would put too high a price on one of Scotland's largest exports.

Good continued: "The minimum pricing scheme which has been proposed could increase the price of a bottle of whisky by more than the two UK duty increases in 2008.

"This proposal from a government in Scotland, if enacted, will have a serious impact on an industry which not only employs directly and indirectly over 40,000 but is also an iconic Scottish product renowned throughout the world."

The 65-year-old drinks industry stalwart also set his sights on the UK government, which brought in a "damaging" 13 per cent increase in excise duty in 2008.

Good warned the "swingeing domestic taxes" would increase by 30 per cent by 2013. And he said that the UK government's increase in duty was "very disappointing".

Good argued that politicians said they wanted to encourage industry but then imposed "swingeing domestic taxes on a truly world-class industry, an industry which earns over £3 billion towards the balance of payments".

He continued: "It is damaging to the industry in the UK, but is particularly harmful as we argue for fair treatment from governments abroad."

His comments came as Glasgow-based Edrington revealed its turnover was up 44 per cent to £420 million and profit before exceptionals up 30.5 per cent to £95m in the year to 31 March, 2009.

However, pre-tax profits were hit as the group spent £27m to restructure its distribution business Maxxium following the departure of its joint venture partner Remy Cointreau last year. Edrington has since formed an alliance with Beam Global. Pre-tax profits fell from £117.6m last year to £82.1m in 2009.

The figures were boosted by sales from its Dominican Republic-based rum business Brugal. According to the report, the group acquired its 61 per cent share in the business for £313m.

The whisky group said that the value of global exports was up 8 per cent to £3bn but volumes had fallen by 5 per cent. Sales in the US fell 11 per cent due to the recession, particularly in the last quarter of 2008, but sales grew in China, France and South Africa.

Last night the Scottish Government failed to provide a response to Good's comments.