The British boss of Diageo has warned the UK government against triggering another downturn in Scotch whisky sales by serving up a tax hike in this month’s budget.

Charles Ireland, general manager for Great Britain, Ireland and France, said the move would be counter-productive because Treasury takings from Scotch fell when the Chancellor imposed a 3.9 per cent tax rise earlier this year.

Sales of the spirit dropped by one million bottles in the first half of this year following March’s tax rise. The increase pushed the duty on an average bottle to 80 per cent.

Mr Ireland, who has worked for the world’s largest spirit producer for 20 years, said the “unfair” levy not only harms the domestic market, but hampers its overseas business by encouraging countries to impose harsher tax regimes.

Diageo produces a range of Scotch brands including Bell’s whisky and Johnnie Walker.

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