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Last Updated: Wednesday, 17 March, 2004, 15:17 GMT
Distillers' anger over tax plan
Whisky warehouse
Whisky producers say the tax stamps will increase costs
Producers of Scotch whisky have said they are deeply disappointed with the Chancellor's plan for tax stamps on bottles of the spirit.

The Chancellor is pressing ahead with the measure in an effort to reduce losses to the Treasury from fraud.

The stamps are intended to provide physical proof that duty has been paid on each bottle.

The whisky industry had proposed an alternative system of guarantees which it claimed would be more effective.

The Scotch Whisky Association described the move as "a decision that will damage Scotch whisky's competitiveness at home and abroad but do little to tackle spirits fraud".

The Association's chief executive Gavin Hewitt said: "We are bitterly disappointed that the Chancellor has not joined with us and taken advantage of the very real benefits of our alternative anti-fraud package which offered the Treasury an effective solution to fraud and more money, more quickly, than tax stamps.

"Tax stamps will impose financial pain on legitimate businesses, particularly smaller enterprises, but will not defeat the fraudster."

Duty freeze

Gordon Brown's political opponents have condemned the change.

Scottish Tory MP Peter Duncan, said: "The Chancellor has sold out on Scotland's whisky industry.

"The Chancellor has today put one-in-50 Scottish jobs at risk, and has erected a massive barrier to new entrants and extra investment in one of Scotland's most important industries."

Scottish National Party MP Angus Robertson said: "The Chancellor has ignored independent advice, and is treating the whisky industry as a cash cow by targeting legitimate businesses with a damaging and expensive new burden."

However, the Chancellor has given one boost to whisky.

The duty on spirits is to be frozen for the seventh year running, bringing it closer to the equivalent charge on other alcoholic drinks.

Mr Hewitt said: "Today's narrowing of the duty gap is of course a further step towards the government delivering on its commitment to introduce increased fairness in taxing alcohol."

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