Fears duty hikes will be used as alternative to minimum price

Banning alcohol sales below duty plus VAT must not be used as a substitute for a minimum price, a trade group has warned.

The government's plans to crack down on cheap alcohol, confirmed yesterday, have raised fears that duty could be used to hike up the price of alcohol.

But Brigid Simmonds, the British Beer & Pub Association's (BBPA) chief executive, said: "Our already high taxes show that duty-plus-VAT cannot be used as a proxy for a minimum price for alcohol.

"This would have a particularly devastating effect on pubs."

Increases in duty are unlikely to effect pocket-money off-trade prices, as big supermarket chains force suppliers to absorb any rises.

The BBPA has spoken out after Don Shenker, chief executive of Alcohol Concern, was reported as saying: "Duty is so low in the UK, that it will still be possible to sell very cheap alcohol and be within the law."

But Simmonds pointed out that UK beer taxes already significantly outstrip other European countries.

UK tax rates are eight times higher than in France, 10 times higher than Spain and 11 times higher than Germany.

BBPA analysis also reveals Britain's beer drinkers are paying 40 per cent of the entire beer duty bill in the European Union.

"When it comes to alcohol taxation, we need a debate based on facts, not myths," said Simmonds.

"Our alcohol taxes are among the highest in the developed world, and for beer we have had huge, 26 per cent duty increases in the past two years. What we really need is a freeze in beer duty in the Budget."

She added: "When it comes to tacking alcohol misuse, what we need most is improved alcohol education and awareness, and tougher, targeted enforcement of the huge range of existing laws. Pubs need lower taxes - and less red tape."