According to a poll, more than a quarter (27%) of Scotch whiskey distillers predict that energy prices would double in 2023.
While 53% of members of the Scotch Whisky Association (SWA), a trade organization, have already witnessed price increases in the last year, 72% of members expect their energy expenses to climb this year.
Also, the SWA emphasized that distilleries are not subject to the government's Energy Bill Assistance Program.
Two-thirds of distillers think that UK chancellor Jeremy Hunt's announcement of an increase in alcohol excise tax in the budget on March 15 might exacerbate growing expenses.
“The government provided much needed certainty in December by extending the duty freeze. It was the right decision then and would be the right decision in the March Budget. Only a few months on from the extension of the freeze, the economic challenges our members and the businesses they rely upon face are not going away. Unlike other parts of the alcohol industry, distillers have been left out in the cold and unable to access the government’s business energy relief scheme, so any rise in duty would further compound the pressures they currently face in paying rising energy costs.” ~ Mark Kent, chief executive of the SWA
To aid the business as it adjusts to the new tax structure, the SWA is urging the chancellor to suspend alcohol duty beyond the first of August. During the cost-of-living crisis, the trade group warned that an increase may hurt company investment and the hotel industry.
Distilleries use electricity for a variety of purposes throughout the production process. Here are some examples:
- Milling and Mashing: Electricity is required to operate the machinery that grinds the grains used in the mash and the pumps that move water and other liquids.
- Fermentation: During the fermentation process, electricity is used to maintain a consistent temperature, which is crucial for the proper growth and activity of yeast.
- Distillation: Distillation is a process that requires a lot of heat, which is typically generated by electricity. This is used to heat up the still and the mash, vaporizing the alcohol which is then condensed back into liquid form.
- Aging: Many distilleries use climate-controlled warehouses to store and age their spirits, and these require electricity to regulate temperature and humidity levels.
- Packaging and Labeling: Finally, electricity is needed to power the machinery that bottles, labels, and packages the finished product.
Overall, electricity is an essential component of the distilling process, and without it, modern distilleries would not be able to produce their products efficiently or at scale.