Brewers welcome tax cut, but above inflation increase stays for cider, wine and spirits
PUB companies and brewers have welcomed moves to cut beer duty and scrap the controversial escalator – but other drinks firms have slammed the chancellor’s decision to retain the 2% above inflation hike for cider, wine and spirits.
Delivering his Budget last month, George Osborne unveiled plans to cut beer duty by 1p and bin the 2% above inflation duty escalator, which brewers and trade groups have long campaigned against.
But there was no such respite for cider, wine and spirits producers, as the chancellor confirmed the escalator, which increases duty by 2% above inflation each year, will continue for those sectors.
Pubcos and brewers welcomed the move on beer duty.
“The end of the beer duty escalator and a cut of 1p a pint will go a long way to helping secure jobs in our industry; and preserving the pleasure of a hard earned pint at the end of the day,” said Chris Jowsey, trading director at Star Pubs & Bars. “We will pass this duty saving on to all our lessees as soon as it becomes effective.”
A spokeswoman for Belhaven owner Greene King also welcomed the scrapping of the escalator and pledged to pass the benefits along to its own licensees.
Simon Cox, UK managing director of Molson Coors, said that the end of the beer duty escalator would “help get a great British industry back into growth”, while Keith Bott, chairman of the Society of Independent Brewers (SIBA), said brewers “can move on, confident that our future investments will be in a sustainable business”.
Brigid Simmons, chief executive of the BBPA, called the decision “absolutely brilliant news” and said the chancellor had “moved to boost jobs in Britain’s pubs at a time when it is most needed”.
However, other parts of the industry were less happy with the chancellor’s decision.
JD Wetherspoon chairman Tim Martin said duty increases in cider, wine and spirits more than cancelled out any benefits from the cut in beer duty, claiming the firm’s excise duty costs would rise by £1.5m following the Budget.
Cider, wine and spirits producers also expressed disappointment.
Gavin Hewitt, chief executive of the Scotch Whisky Association, said the Budget was “an unfair and incomprehensible attack on the Scotch whisky industry in its domestic market”.
And Paul Bartlett, chair of the National Association of Cider Makers, said the duty escalator should have been scrapped across the board. “As vibrant pubs have a drinks offer much broader than just beer, the abolition of the escalator for all alcohol would have gone further,” he said.
Image – Beer duty was cut in last month’s Budget, but other drinks categories were less fortunate.
• The duty escalator will add 10p to a bottle of wine and 53p to a litre bottle of spirits
• Duty on a bottle of wine is now £2 (+10p)
• Duty on a 70cl bottle of vodka (37.5%ABV) is now £7.41 (+37p)
• Duty on a 70cl bottle of gin is now £7.90 (+39p)
• Duty on a pint of cider is now 23p (+2p)
• Duty on a pint of beer is now 43p (-1p)
(Figures from WSTA)