HMRC figures show the number of bottles sold dropped from 87.5 million in 2013 to 83.3 million last year.
The SWA said this is evidence that the “onerous level of taxation” – 78% of the money spent on Scotch goes to the Treasury – is damaging a domestic industry that is of great importance to the economy.
It believes that a 2% duty cut could boost an industry that is worth £5 billion annually to the UK economy and supports 40,000 jobs.
David Frost, Scotch Whisky Association chief executive, said: “Scotch Whisky is a massive export success for the UK so it’s obviously disappointing to see this decline in volumes in our domestic market.
“In next week’s Budget the Chancellor has the perfect opportunity to support an important UK industry. He should cut spirits duty by 2%. This move would also benefit consumers and public finances.
“In last year’s Budget, the Chancellor highlighted Scotch whisky as a ‘huge British success story’. We hope this year too he will show his support for this world class manufacturing industry.”
According to the SWA’s research, two-thirds of drinkers are unaware of how large a cut the taxman takes on a bottle of Scotch, and when told 84% of consumers think it is unfair.