Tom McMullen: Hitting supermarkets with a 'responsibility tax' will level the playing field
No sooner had McMullen, the Hertford-based family brewer, welcomed another member of the McMullen clan to its ranks than he goes and comes up with a radical plan to shake up the tax system governing alcohol.
Tom McMullen officially joined the brewer as company secretary last month, the sixth generation of the family to do so.
The new arrival had still to complete his induction into the brewery by the time he'd drawn up a set of proposals to close the taxation gap between the on and off-trades and address how to better fund the drive towards a more responsible consumption of alcohol.
The plan came to McMullen while he completed an MBA at Imperial College Business School, London.
"It occurred to me that the sorts of costs being borne by the on-trade vis-à-vis the consumption of alcohol are simply not met by the off-trade," he says.
"Supermarkets say they incur costs when they buy in alcohol to sell, but they can't claim to shoulder any responsibility after it has been purchased. Pubs are regulated environments for the consumption of alcohol, yet a consumer pays 300
per cent more VAT for a pint in a pub than the equivalent in a supermarket. That imbalance needs to be addressed."
McMullen - backed by BII chief executive Neil Robertson - has called for a social responsibility tax to be levied by the government on supermarkets to address this disparity.
He accepts it would be a difficult sell for ministers, but says the argument about linking social responsibility with tax can win over the doubters.
"Can you differentiate duty? I believe you can," he says. "The EU's excise directive says member states retain the right to levy taxes at their discretion. The coalition government could introduce a new tax levied on the supply of alcohol which is to be consumed in an unsupervised environment."
His plan has already been submitted to the Treasury. So what does he think officials make of all this?
"They're hard to read, to be honest. There is room for some legal analysis of the EU directive but there is no timescale for them to get back to us," he says.
The chances of the government acting on the 'social responsibility tax' are likely to be at best slim.
But in providing food for thought on how to draw together the strings of taxation and the consumption of alcohol in different environments, the young McMullen has kicked off his career in the brewing industry in a most interesting way.
