Pubs and brewers react angrily to the Budget

21 March 2012 by
Pubs and brewers react angrily to the Budget

The pub and brewing industries have roundly condemned today's news in the Budget that the alcohol duty escalator will remain in place.

Here are just some of the comments from figures across the industry:

"The beer duty rise announced in the Budget Statement, although widely predicted, is unfair to brewers, pubs, pub customers, beer drinkers and all of us that live relatively modestly and enjoy simple pleasures. Brewers and beer lovers help bail out the banks, chip in to fund quantative easing and generally do our bit to help re-jig the British and world economy - and beer duty continues to increase, no matter what.

"I cannot remember when beer duty was left alone - or God forbid - was reduced, and we have been brewing for 27 years. We now have the dubious honour of being top of the European League with the most expensive beer duty in Europe (except for the brewing minnows of Finland). Germany produces twice as much beer as the UK and yet our Government takes eight times as much in duty - other countries support their brewing industries."
Roger Jones, managing director, Bath Ales

"Our Tax Free Beer campaign demonstrated that most consumers don't understand just how much they pay in tax on every pint they buy - and are stunned when they find out. The increases on beer duty announced today, on top of already crippling levels, will drive more people out of pubs, leading to further closures and job losses. If Brakspear on its own can generate this level of support, imagine how much more could be achieved if other brewers and pub companies joined us by running similar campaigns? Something has to be done: our industry simply cannot take much more punishment and survive."
Tom Davies, chief executive, Brakspear

"This (the new 20% rate for the new Machine Games Duty) is a bitter blow. For this new tax to be revenue neutral it should not have been more than 15%. It will cost the pub sector £14 million in extra taxes next year. The Government could also have frozen the existing Amusement Machine Licence Duty instead of raising it by inflation, given we now have a very difficult transitional year for the pub and machine industries. Fruit machines and quiz machines are an important part of the fabric of British pubs, a vital income stream, and valued by customers. For quiz-based machines, this punitive new tax rate could see many of them disappear from pubs."
Brigid Simmonds, chief executive, British Beer and Pub Association

"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 fightback in a bid to make the Government see sense. We today urge all beer drinkers to visit to get behind this new industry-backed e-petition to help safeguard the future of the beer and pub industry.'

Mike Benner, chief executive, Campaign for Real Ale (Camra)

"It is a good idea to increase personal allowances, taking lots of relatively low earners out of the tax system. It is also a good idea to curtail the abuse of stamp duty by people using foreign companies. We welcome the reduction in corporation tax, which will make Britain more competitive. We are disappointed that excise duties on alcohol will increase by 2% beyond the rate of inflation, since British people are now paying 40% of all the alcohol duties in Europe. We are also very disappointed that pubs will continue to pay 20% VAT on food when supermarkets pay nothing, enabling them to cross subsidise their prices for alcoholic drinks."

Tim Martin, chairman, JD Wetherspoon

"Customers in our local pubs in particular will feel the benefit of a few extra pounds in their pockets as a result of the increased personal tax allowance. The tragedy is that the feelgood factor is wiped out by the sharp increase in beer prices through the continuation of the duty escalator.

"We've worked hard over the past year to build cask beer sales in our pubs, supporting local brewers through the SIBA DDS scheme, as well as to increase the range of world beers we stock. Price increases are a real deterrent to going to the pub for a pint when customers are trying to balance the family budget."

Nigel Wright, chief operating officer, managed pub group TCG

"There are no winners from the beer duty escalator. Ordinary British drinkers are paying more tax to drink less beer, reducing overall Government tax revenues and forcing British brewing into a deeper, duty-fuelled decline.

"The escalator has lost all sense of proportion and logic - beer drinkers in Britain already pay a whopping 40% of all European beer tax and yet drink only 13% of the beer - and we are disappointed that the Government has chosen not to end this crippling policy."

Mark Hunter, chief executive, Molson Coors, and chairman, British Beer and Pub Association

"Though not entirely unexpected, this decision puts at risk the progress the industry has made in recent years to be more sustainable, to increase consumer choice, to address misuse and grow Government revenues. The industry has just renewed its commitment to be even more sustainable and to invest in the rural areas where we are based and this move makes that much tougher. This comes at a time when consumers are already reducing their spending - the chance to enjoy a glass of cider just got more expensive. There is a budget deficit to address and that is understood. However, for an industry with an investment cycle measured in decades, it is vital that we quickly return to a stable and sensible duty regime."
Henry Chevallier, chair, National Association of Cider Makers (NACM)

"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."
Keith Bott, chairman, Society of Independent Brewers (SIBA)

"Pubs could be an engine for growth and create new jobs for young people now the Chancellor has called time on job-destroying beer tax rises in this Budget. The number of people who regularly drink in bars and pubs has decreased from 90% to 60% and that has been driven primarily by rising costs of alcohol; as well as competition from supermarkets and a fall in the number of people going out in tough economic times. The Government's drive to encourage people to have a more health conscious attitude towards alcohol has also had an impact.

"We are pleased that the Government has kept a level head while looking out for people's health. By freezing duty we'll save jobs and give the pub sector a much needed boost."
Duncan Lillie, director, Shelley Sandzer

"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."

"We needed the additional costs and burdens of today's Budget like a hole in the head. The Chancellor may have said ‘no change' but a 6% increase in excise duty is nothing to be sneezed at. It will be felt immediately in price increases across the bar and that is before you take into account the planned introduction of tax stamps and gaming machine duty, which will all increase costs."
Kate Nicholls, strategic affairs director, Association of Licensed Multiple Retailers

By Neil Gerrard

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