Tax escalator putting cost of a pint out of reach for many
The beer firms say the annual 2% above the rate of inflation increase, brought in by the previous government in 2008 and continued under the coalition, is hampering growth in the sector and contributing to pub closures and job losses.
An e-petition calling for the duty escalator to be scrapped, which closes on February 15, has so far attracted more than 107,000 signatures and prompted a Parliamentary debate last November, in which MPs voted for the policy to be reviewed. However, alcohol duty did not feature in the chancellor’s Autumn Statement in early December.
Now brewers are renewing calls for the government to scrap the duty escalator ahead of the Budget on March 20.
John Gemmell, trading director at Heineken North, said that £1 from every pint purchased goes to the Exchequer in duty and VAT.
“Sadly, this means people are being driven away from one of life’s simple pleasures, as a ‘pint in the pub’ is increasingly being pushed beyond the pockets of many,” he said. “Just as increasing duty drives people away from beer, it also threatens the important role that beer and pubs play in supporting almost one million jobs in the UK, just under half of which are held by people under the age of 25.”
Alisdair Hamilton, on-trade director for Scotland at Carling owner Molson Coors, said the duty escalator has “lost all sense of proportion”.
“Beer drinkers in Britain already pay a massive 40% of all European beer tax, yet they drink only 13% of the beer,” he said. “It means ordinary drinkers are paying more tax to drink less beer, reducing overall government tax revenues and forcing both brewers and those communities with pubs as their backbone into a deeper, duty-fuelled decline.”
Petra Wetzel, owner of the West brewery in Glasgow, said: “There are a record amount of pubs closing each week and the government needs to remember that it makes a lot of money from beer duty, so it’s important that sales stay strong – surely they will lose more money in the long-term if operators cannot continue to keep their businesses open?”
Tennent Caledonian MD John Gilligan said the duty escalator is “contributing to pub closures and job losses”.