Beer tax hike is self defeating
Tax increases on beer have been "self defeating" and have actually eroded Treasury revenues.
That is the startling news from the British Beer and Pub Association (BBPA)e as it repeated calls to MPs to freeze duty on beer.
Despite tax increases of 8.9% on beer over the last years, the revenue collected by the Treasury has fallen a massive £46m.
In the last two financial years, beer duty revenues have undershot Treasury forecasts by £160m and £130m respectively - proving beer duty has already hit its revenue maximising level.
Britain's brewers and pubs are a unique national asset and are in desperate need of a period of stabilityMark HastingsBBPA
"The black hole created by the policy of increasing beer taxes means the Treasury now has to review its addiction to beer tax hikes," said BBPA director of communications Mark Hastings.
"With so much pressure on Government finances, raising duty makes no sense, as it not only punishes an industry under severe pressure, but it leaves the Government with less money for our schools and hospitals."
Perfect storm
Hastings added that Britain's brewers were now facing the "perfect storm" of sinking sales and rising costs.
Beer sales have fallen to their lowest level since the Great Depression of the 1930s and pubs are selling 14m fewer pints a day than in 1979.
At the same time barley, energy, fuel, metals and glass prices are all soaring.
Total beer duty revenues· 2004/5: £3,101m· 2005/6: £3.076m (down £25 million)· 2006/7: £3,072m (down £4m)· 2007/8: (forecast) £3,055m (down £17m)
"The pressures are intense. Since 1997, 36 breweries have shut down and more than 2,000 jobs have been lost.
"In the last seven years alone, six pubs a week have closed. Since May last year, 470 pubs have closed.
"Britain's brewers and pubs are a unique national asset and are in desperate need of a period of stability.
"That is why we are asking the Chancellor for a freeze in beer duty in his Budget on March 12th."
We, at the MA, are also petitioning the Prime Minister directly. To sign our petition click here No Tax Increase on Alcohol.
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