The Scottish Government is planning to increase business rates for large retailers of alcohol and tobacco in Scotland, meaning major food retailers would have to pay an extra half a billion pounds in tax over the next four years.

The measure is part of the Scottish Government’s spending plans for the coming year, as revealed in its Budget today.

The Scottish Retail Consortium has condemned the levy - revealed by Scottish finance secretary John Swinney –labelling it as “an illogical and unjustified tax on the supermarkets”.

The levy is being justified as a source of extra health funding, according to the SRC.

However, SRC said it “penalises responsible retailers of alcohol and tobacco and disregards all other parts of the supply chain”.

Earlier this year the previous Scottish Government’s proposed business rate hike for large retail stores was blocked, with major retailers across Scotland including Tesco, Marks & Spencer and John Lewis protesting against it.

SRC director Ian Shearer said: “This new tax is a blatant fund-raising exercise which is illogical and discriminatory.

“It targets a part of the retail sector which funds DrinkAware, rigorously prevents under-age sales with Challenge 25 and has led the way on clear alcohol labelling, giving it an exemplary record on the sale of alcohol and tobacco.

“Supermarket margins are already cut to the bone as stores compete to offer the best deals to cash-strapped consumers. The UK already has some of the highest alcohol taxes in Europe.

“This tax would make it harder for food retailers to keep prices down for customers, and makes Scotland a less attractive place to do business, invest and create jobs.”

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