Treasury's beer tax black hole to reach £1.2b as beer sales plummet

27 October 2008 by
Treasury's beer tax black hole to reach £1.2b as beer sales plummet

The Treasury's beer tax "black hole" is set to reach £1.2b as beer sales continue to plummet, the British Beer & Pub Association (BBPA) warned today.

Newly published figures show that beer sales in pubs fell 8.1% from July to September compared with the same period last year. This equates to 104m fewer pints served during the period than in 2007 or 1.1m fewer pints a day.

Total beer sales, including off trade sales in supermarkets and off-licences, are down 7.2% year-on-year.

As a consequence of the decline in sales, the Treasury is facing a £1.2b tax shortfall, in real terms, over the next three years compared with their forecasts, according to the BBPA

The trade body estimates the Government has taken £138m less in beer duty and VAT in the six months since the Budget, which increased duty on alcohol and introduced an inflation escalator for the next four years.

BBPA chief executive Rob Hayward said: "Sinking beer sales and the record five pubs a day closing is a barometer of the UK economic climate. Government needs to be looking to ease the constraints of the tax and regulatory burden on our sector."

Hayward called for the beer tax escalator and proposed increase in regulation for the sector to be shelved.

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By Chris Druce

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