Beer vs Whisky: duty battle on
The annual alcohol industry in-fighting has once again broken out in the run up to the Budget — with each sector calling for a freeze on its own drinks at the expense of others.
The British Beer and Pub Association (BBPA) hit out at the Scotch Whisky Association's (SWA) Budget submission, which called for a duty freeze on spirits. Duty is set to rise around 7% in the Budget — 2% above the Consumer Price Index inflation rate.
The BBPA said that spirits were already the cheapest form of alcohol available and shifting the tax burden on to lower strength drinks, such as beer, would make spirits even cheaper in relative terms. "The alcohol duty system should not encourage consumption of higher-strength products," it said.
"Taxation policy should 'nudge' people towards lower-strength, pub-based drinks like beer. Beer is low in alcohol content and pubs are the home of responsible consumption and social drinking."
Cheap spirits
It pointed out that duty on beer has increased by 60% while spirits duty has increased by only 15% since 1995.
"Shifting alcohol taxes onto lower-strength drinks like beer would accelerate the trend towards cheap spirits, undermining health policy as well as damaging jobs and the economy," said BBPA chief executive Brigid Simmonds.
"Virtually no other country in the world taxes alcohol in this way, and the UK government has rightly signalled it would not do so in a major review of alcohol taxes last year. Instead, the Government should use next week's Budget to encourage consumers towards lower-strength drinks, and by freezing Beer tax."
Discrimination
The SWA said that its sector "faces discrimination" because consumers pay up to 250% more tax for choosing Scotch Whisky than other drinks.
"This is unfair to a key sector of British manufacturing, and for the millions of people who enjoy Scotch Whisky every year," said Gavin Hewitt, SWA chief executive.
"The Government has consistently said it will do whatever it can to assist the industry at home and abroad. We welcome this support and ask the Government to make good its promise in the home market , with a freeze on duty levels for Scotch Whisky in next week's Budget."
