Proposal to give distilleries a tax break

There are currently seven distilleries in the island and deputies Simon Vermeulen and Nick Moakes want to apply a 50% tax reduction to the price of a bottle of spirits produced by the small suppliers.

If successful, their amendment to the 2021 Budget would bring small distilleries of spirits into line with the discount applied to independent small breweries and small cider-makers.

By creating an environment ripe for micro-distilleries, it would also enhance the island’s reputation as a prime player in the artisanal spirits market.

A litre of spirits would attract duty at £7.98 instead of £15.96.

The criteria for what constitutes an ‘independent small distiller of spirits’ is set out in the amendment as needing to comply with four conditions.

Firstly it must not distil more than 20,000 litres of alcohol per year, it must be legally and economically independent of any other distiller, it must only use premises located physically apart from any other distiller, and it must not operate under licence.

James Meller of the family-owned business Rocquette Cider started distilling Channel Island Cider Brandy in 2019 and it will be ready in 2022, having been aged in French oak barrels.

Mr Meller raised a toast to the amendment and hoped the States would back it.

‘Obviously I think it’s a good thing, the reason being that the cost of operating as a small distillery is considerably higher when you compare yourself to the huge distillers.

‘There’s a lot of interest in craft distilling and it could grow with the right incentives, because getting a business off the ground is hard.

‘The craft gin market has exploded around the world, and off the back of that there’s potential for brandy and rum, and maybe there’s an opportunity for someone to do whisky locally.

‘This year has been different, but tourists love coming on our tours and hearing the story behind what they’re drinking.’

Luke Wheadon is the founder of Wheadon’s Gin, which has now become the Channel Island Liquor Company.

He said it was an important and growing market, so any tax breaks were welcome.

‘We’re producing really meaningful products with a really strong brand – our gin gets sent all around the world and has an international reputation.

‘There are scales of economies so for us to compete against the large suppliers is difficult and lowering the duty will allow us to be more competitive.

‘It will also mean that the island is supporting local business. We would be able to offer our products cheaper and that money would stay in the local economy.

‘And it would create parity because it would bring us into line with the brewers and cider-makers.’