New supermarket tax plan to tackle alcohol abuse

A radical plan to charge supermarkets a 'social responsibility' tax while cutting VAT paid by pubs to just five per cent could revolutionise the way alcohol abuse is tackled, a trade chief has claimed.

Neil Robertson, the BII's chief executive, said levying a tax on the off-trade would bring supermarkets in line with pubs over the cost of supervising drinkers.

"I'm very excited by this," said Robertson. "These proposals start to ask the right questions about the costs of social responsibility.

"We have worked out the cost of providing a supervised environment for the consumption of alcohol.

"And mindful of the principle that the 'polluter pays', we feel the supermarkets should be paying more."

The plans have been submitted to the Treasury and informal talks held with officials.

Robertson said there was increasing evidence that if money was spent on social responsibility it could save government spending elsewhere.

"Best Bar None schemes have saved the NHS £35m, and reducing VAT in pubs five per cent would grow the on-trade by the same figure, creating 25,000 jobs," he said.

The idea was thought up by Tom McMullen, company secretary of McMullen brewery. "Supermarkets can say they incur costs when it comes to buying alcoholic products and selling them on," he said. "But they can't say, as pubs can, that they have any influence over what happens to it or to those who consume it once it's been purchased."

A pub customer pays 300 per cent more VAT per pint than a supermarket consumer, McMullen said, and pubs bore a level of cost related to the consumption of alcohol that the off-trade avoided.

"A minimum price policy would unfairly enrich the supermarkets, whereas this means extra money would go to the government for social good," he added.

While the 'social responsibility tax' might not be the end result of the plans, Robertson said he was confident it would kick-start a new way of thinking about the issues.

However, a spokesman for the British Retail Consortium, said: "Retailers already pay billions of pounds in tax a year and business rates that fund all the things that go on locally," he said.

He added it was "simplistic and misguided" to believe "forcing" up prices would deal with the problems. I don't think it's the job of government to try to promote or help one sector of the alcohol business over another."

News of the plans emerged last week just days after a health expert said VAT on alcohol sold in pubs should be cut.

Dr Nick Sheron, a co-founder of the Alcohol Health Alliance, said if VAT for pub drink sales was reduced to 12 per cent it would mean duty could be raised and not affect the price of a pint.

Writing in the British Medical Journal, Sheron stated: "Pubs are expensive to run and have to charge more for alcohol. As a result they pay more VAT, which puts the price up the price of a drink even further."

VAT is due to be increased by 2.5 per cent to 20 per cent on January 4, which will force many pubs to raise their prices.