UK government is implored to help the trade in next month’s Budget
WITH the Budget just around the corner, beer duty is once again set to be a hot topic in the trade.
Last year, chancellor George Osborne appeared to listen to the brewing and pub industries when he removed the much-maligned duty escalator for beer and cut the rate of tax by 1p a pint.
And with the next Budget set for March 19, trade group the British Beer & Pub Association (BBPA) has called for duty to be frozen in 2014.
Last year’s cut in duty was a winner for both the brewing and pub industries, according to the BBPA.
The organisation, which represents brewers and pubs across the UK, claimed 10,000 British jobs were secured as a direct result of last year’s tax cut (the BBPA said the beer and pub industries are responsible for around 900,000 jobs across the UK), while increased confidence in the sector has encouraged companies to commit to around £400 million of investment since last March.
However, the trade group said there is still room for improvement.
Despite last year’s tax cut, it said Britain still has a comparatively high rate of duty on beer when compared to other EU countries.
And the BBPA has held up its own ‘Beer Barometer’ – a quarterly record of beer sales in the UK – to support the argument for a freeze in duty this year.
According to the figures, total beer sales grew in the second two quarters of 2013 – the first time in a decade that UK beer sales have risen in two consecutive quarters.
There is no common good in taxing one of life’s simple pleasures out of existence.
And while on-trade beer sales fell in both quarters, the BBPA said the decline in sales has slowed since the Budget last year.
“These figures demonstrate that cutting beer duty helps increase beer sales, stimulates industry investment and saves jobs,” said BBPA chief executive Brigid Simmonds.
“We hope the chancellor takes note and freezes beer duty in his next Budget to give a further boost to British beer and pubs.”
The BBPA’s calls for a freeze in beer duty were echoed by brewers.
Martin Coyle, director of emerging markets and craft at Molson Coors, said the level of duty in the UK is “crippling the beer industry” – and said it’s the independent brewers and pubs that will suffer the most.
“A tax increase of 42% over five years is not easily undone,” said Coyle.
“We believe that a further freeze in this year’s Budget will make a major difference.
“There is no common good in taxing one of life’s simple pleasures – sharing a beer with friends – out of existence.
“Ultimately the Treasury will lose out, brewing will decline and pubs will close.”
David Scott, director of brands and insight at Carlsberg UK, agreed.
He described the cut in beer duty last year as “a welcome boost to the trade” and said he hoped for a further freeze this year.
And Arran Brewery managing director Gerald Michaluk said another freeze on duty would “keep this positive trend going and not kill it off with a tax hike frost”.