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Beer Tax

Budget 2012: Pub industry condemns beer duty rise

 

George OsbornePub companies and trade groups have expressed their dismay at the Chancellor’s decision to maintain the alcohol duty escalator in the 2012 budget, which has resulted in a 5% rise in duty - to come into force at midnight on Sunday.

In his speech to the House of Commons, George Osborne said: “I have no further changes to make to the duty rates set out by my predecessor.”

He added: “The Government will shortly be publishing its Alcohol Strategy to address the growing problem of alcohol abuse, and the many billions of pounds it costs our NHS and criminal justice system.”

The alcohol duty escalator was introduced in 2008 and has seen beer duty rise by 2% above the rate of inflation each year. The new rise in duty is calculated according to an expected inflation rate of 3% in September 2012.

More than 100 MPs had supported the industry’s calls to scrap the escalator in this year’s budget, but they have not been heard by the Chancellor.

Commenting on today’s 5% rise in beer duty, Brigid Simmonds, chief executive of the British Beer & Pub Association (BBPA), said: “This is a huge lost opportunity to put British jobs and pubs first. Beer tax has now risen by 42 cent since the misguided ‘escalator’ policy was introduced just four years ago. It means the loss of over 5,000 jobs this year, and hundreds of pub closures.

60%

The total rise in the duty on beer in the last 8 years

“Since 2004, the tax on beer has risen by 60 per cent, but tax revenues have fallen far short, with only a 10 per cent rise in duty revenues despite the huge toll in lost jobs and pubs – and lost revenue through VAT as beer sales have fallen by 25 per cent. It beggars belief that further hikes are planned next year. The Government must rethink this damaging policy before even more harm is done to the British brewing and the pub trade.

“Successive Chancellors have ignored the views of industry, consumers and indeed large numbers of their Parliamentary colleagues for far too long.

“We need a full debate in Parliament about the wider impact the duty escalator is having on Britain’s brewers and pubs, and the hard-pressed British beer-drinker. The UK already has the second highest beer duty rate in Europe and British consumers pay 40 per cent of the EU’s beer tax bill, despite only drinking 13 per cent of its beer.”

The BBPA has also joined with CAMRA (the Campaign for Real Ale) and SIBA (Society of Independent Brewers), calling for those who support Britain’s beers and pubs to sign the e-petition to ‘Stop the Beer Duty Escalator’.

e-petition

‘Stop the Beer Duty Escalator’

Sign the petition to get the government to remove the beer duty escalator at the next budget. This will help keep beer more affordable and go a long way to supporting the institution that is the great British pub.

Sign the petition

Mike Benner, CAMRA chief executive, added: “The fact Britons are forced to pay over 40% of the EU beer tax bill, but consume only 13% of the beer sold in Europe, is remarkable.

“British beer in a pub is so heavily hit with duty and VAT, the tax man’s whirlwind hikes translate to him guzzling a third of every pint served, a shadow cast over the beer drinker depriving people of an affordable night down their local.

“Such high taxes on beer are totally unsustainable, and therefore CAMRA is launching a consumer fight back in a bid to make the Government see sense. We today urge all beer drinkers to visit Save your pint to get behind this new industry-backed e-petition to help safeguard the future of the beer and pub industry.”

SIBA chairman Keith Bott slammed the Budget as “anti-beer and anti-pub.” He said: “This is not a Budget from a Government which claims, as does this one, to be supportive of pubs as places that encourage social cohesion and responsible alcohol consumption. Once again, we see a disconnect between what our policymakers say about beer and pubs and what they do – which is to impose further, punishing taxes on an industry that is already on its knees.”

Kate Nicholls, strategic affairs director of the Association of Licensed Multiple Retailers (ALMR), added: “The Chancellor today had a unique opportunity to send a clear signal that his Government was open for business and serious about job creation.

“That opportunity has been lost. Instead of a catalyst the Chancellor has effectively applied the brakes to investment, job creation and innovation in one of this country’s key economic drivers – licensed hospitality.”

Other trade bodies, MPs and brewers expressed their disappointment at the outcome of today’s budget for the British pub and brewing industries.