Craft Distillers Push for Equal Benefits Under Small Producer Relief

A coalition of 17 UK craft distillers is urging the government to reform the Small Producer Relief (SPR) scheme, calling it “discriminatory” for excluding spirits producers. The group, led by Liam Hirt, founder of Circumstance and Psychopomp Distilleries in Bristol, addressed an open letter to Chancellor Rachel Reeves ahead of the upcoming Autumn Budget on November 26, 2025.

Small Producer Relief Leaves Spirits Behind

The Small Producer Relief system currently supports only producers of low-alcohol beverages such as beer and cider. It grants a reduced alcohol duty rate to companies producing drinks with an ABV of 8.5% or lower and with an annual output below 450,000 liters of pure alcohol.

For small distilleries, whose spirits typically exceed 37.5% ABV, the scheme provides no financial advantage. Introduced in August 2023 to replace the Small Brewers’ Relief program, SPR was promoted as a “radical simplification” of the alcohol duty system. However, distillers argue that it excludes some of the most innovative and entrepreneurial businesses in the UK drinks sector.

In their open letter, the signatories stated that the Small Producer Relief “undermines its goal of supporting small businesses and innovation across the UK drinks industry.”

“Reward Innovation, Not Penalize It”

According to Hirt, the current system discourages creativity rather than rewarding it. “Duty relief for beer and cider has proven its value,” he told The Spirits Business. “It helped small producers compete with global corporations, encouraged hundreds of new entrants, and fueled diversity and innovation. Extending the same support to spirits would deliver those same benefits—and solidify the UK’s position as a world leader in craft distilling.”

Hirt emphasized that the Small Producer Relief should evolve to reflect the changing face of the UK drinks market. “The duty framework should reward innovation, not penalize it,” he said.

No Public Health Basis for Exclusion

Hirt and his fellow distillers argue that excluding spirits lacks any health-based justification. “A unit of alcohol in a gin is no more harmful than a unit in a beer,” Hirt pointed out. “In fact, many spirits served with low- or zero-sugar mixers contain fewer calories than most beers or ciders.”

He also highlighted a concerning trend: according to His Majesty’s Revenue & Customs (HMRC), spirits duty receipts have dropped by up to £700 million (US$915 million) over the past two years, even as duties have risen. Hirt believes that a reformed and inclusive Small Producer Relief could reverse that decline by stimulating investment, boosting compliance, and driving sustainable sector growth—ultimately increasing long-term tax revenue for the Treasury.

Citing data from the Scotch Whisky Association, he added that spirits now account for 38% of pub alcohol profits, reinforcing their importance to the broader UK drinks ecosystem.

Broad Support from Industry Leaders

The open letter was co-signed by 16 industry figures, including Richard Foster (Exploring Whisky), Shaun Ward (Ludlow Distillery), Paul Abbott (Grasmere Distillery), Stephen Russell (Copper Rivet), Amy Seton (Grain & Glass), and Tim Etherington-Judge (Avallen), among others.

Trade organizations such as the Wine and Spirit Trade Association (WSTA) have echoed these sentiments, calling for the inclusion of wine and spirits within the Small Producer Relief framework. The WSTA and other groups are also pressing the government to freeze spirits duty, which rose by 10.1% in August 2023.

A Call for Fairness in the UK Drinks Industry

For small distillers like Hirt, the demand is clear: extend Small Producer Relief to include spirits and level the playing field for all alcohol producers. “Including spirits in the scheme would deliver fairness, drive exports, and strengthen the entire drinks ecosystem—from distilleries to pubs to the Treasury,” Hirt said.

As the UK prepares for the autumn Budget, the craft spirits community awaits the government’s response—hoping that this time, innovation won’t be left out of the equation.

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Source of Information

The Spirits Business Article — Craft distillers demand equal duty relief, written by Nicola Carruthers

The image of the article is courtesy of ©Nairod Reyes via Canva.com