Trade reaction to the Budget

By MA reporter

- Last updated on GMT

Related tags: Beer

Budget: duty to go up 7.5%
Budget: duty to go up 7.5%
The trade gives their views following the news that the Chancellor stuck to plans to increase duty 7.5%. The Campaign for Real Ale, CAMRA "It is...

The trade gives their views following the news that the Chancellor stuck to plans to increase duty 7.5%.

The Campaign for Real Ale, CAMRA

"It is incredible to consider that Britain's beer drinkers are forced to endure the second highest rate of beer tax in Europe, particularly when the Prime Minister promised a "pub friendly Government" with the pub at the heart of the Big Society," said chief executive Mike Benner.

"By penalising the vast majority of responsible pub goers, the Government is not getting to the root of the problem, which remains cheap alcohol sold in an irresponsible manner in the off-trade.

"While it is welcome to see the Government introducing measures to recognise the benefits of beer as a low alcohol drink, we hope the Government will work with the EU and the wider industry to secure a change in EU rules to increase today's threshold to 3.5% ABV to further benefit Britain's beer drinkers."

British Beer and Pub Association, BBPA

"In sticking to the failed policy of the beer tax escalator, the Government has delivered a hammer blow to pubs and pubgoers," said chief executive Brigid Simmonds.

"This will not raise any more money for the Treasury, cost ten thousand jobs this year alone and see many more pubs close.

"This policy hampers growth and damages pubs and the communities which rely on them. The fight to end this damaging policy continues.

"Increasing the tax on beer in line with other types of drinks is also a missed opportunity to recognise beer's wider economic contribution. Beer has a special place in keeping Britain's pubs thriving, and is also as the nations' favourite, lower-strength drink.

"However the Government does deserve credit for the 50% reduced rate for beers below 2.8% ABV. It will act as a spur to innovation in what is a vital UK industry, and over time, should help nudge consumers towards lower-strength drinks. The next step is to move towards a zero rate and, as importantly, for the Government to support a change in European law to increase the 2.8% ABV threshold to which reduced rates can be applied."

"When it comes to the new rate on higher strength beers, this high rate means that vintage ales and speciality beers are now taxed considerably more than 13% ABV imported wines.

"While we support the Government's intention to encourage consumers towards lower-strength products, it is inconsistent policy-making to apply additional taxes solely to stronger beers whilst ignoring stronger wines and spirits. These beers account for less than half a per cent of total alcohol sales.

Society of Independent Brewers, SIBA

SIBA chairman Keith Bott said, "This is a real kick in the teeth to the local brewing sector, one of the few British success stories of recent years," said SIBA chairman Keith Bott.

"Local brewers are just the kind of business this government says it wants to see prosper: they create jobs for local people and contribute to the local and wider British economy by using home-grown ingredients. Yet the current beer taxation regime is killing off our main route to market — the British pub."

"The Treasury claimed before the Budget that their beer duty escalator is 'baked in'. We say it is half baked! Continuing to increase taxes on draught beer, drunk in the socially responsible environment of the pub, will serve only to increase purchases of cheap vodka for unsupervised home consumption. We fail to see how this policy can help tackle binge drinking."

Coffer Corporate Leisure

"This budget has done little for leisure operators," said managing director Mark Sheehan.

"By raising the nil tax threshold, the army of lower paid employees working in the hospitality sectors will benefit in the short-term, but by increasing the burden on those businesses who employ these people with seemingly endless cost increases, how can they be relied on to sustain the economy? The Budget offers little help to alleviate pressure on operators' suffering and does little to kick-start consumer spending. Altogether, the net increase in income tax and national insurance against savings for many earners will hit consumer spending further . This is compounded with the recent VAT increase in December and the outstripping of wage increases by inflation — a hard combination to bear for operators.

"With 4-5% predicted inflation for the year above compared to 1.7% predicted growth in the economy, this further illustrates a very tough trading environment for the leisure and hospitality sector, which employs over two million people and adds £19 billion to the UK economy every year. Operators need more help than they are being offered in this budget to help lead the economy out of recession and creating local jobs at a time when national unemployment levels are so high. In provincial areas especially, the hospitality sector should be better supported in keeping jobs alive and therefore helping to sustain the economy.

"On a positive note the increase in EIS relief will help to attract investors in small businesses. With bank debt all but gone for many, raising cash by selling equity in the answer and this tax relief will help. We are helping many small businesses expand in this way.

"Notwithstanding the issues facing operators as a result of the Budget, there is a sense of optimism amongst investors within the leisure and hospitality sector. We believe we are now past the bottom of the cycle and investors are piling in to invest in strong businesses. We are now in a recovery phase. Many deals will be done in the months ahead."

BrewDog

"At BrewDog we wholeheartedly back the rise in the duty on beer," said co-founder James Watt. "The faceless, monolithic corporations who cowardly discount their supposedly 'premium' industrially brewed lagers are slowly suffocating the UK beer industry and have already mangled people's perception of beer - this could help turn that around.

"The increase in duty can only make it less profitable for them to sell their beers at completely irresponsible prices and decrease the huge impact this has on society as a whole. As part of a society and a community they have a responsibility to people, which they have been ignoring for far too long in the name of profits and corporate greed.

"Yes, the increase in duty will make beer, including BrewDog products, more expensive, but we feel this will help craft beer continue to carve a more significant position in the industry. If someone has to pay slightly more for their beer, they expect more from it - any industrial, chemical ridden, insipid mass-market lager will only leave them disappointed.

"However, with beer being slightly more expensive, they will see the true value of craft beer - beer brewed with passion, integrity and using the best ingredients. Our craft beers are loaded with flavour, mouth feel, aroma and we are on a mission to show the UK that beer does not have to be mainstream, generic, industrial and tasteless.

"If the cost of cheap beer goes up, it can redefine perceptions of value and help craft beer brands to compete with the giant, money-hungry breweries.

"Put simply - there is a craft beer revolution going on in the UK, and increases in duty can only catalyse this. By helping to get more people to drink better quality beer and reduce the potential of irresponsible pricing by industrial brewers, this could be a real step change for the UK drinks industry.

"We also fully back any proposals for a minimum price per unit on alcohol and were the only company to publically back these recent proposals by the Scottish Government."

Molson Coors

"We fail to see how today's budget decisions fit within the government's emerging framework around alcohol responsibility or help to build a culture of moderation in the UK," said chief executive Mark Hunter.

"We are baffled by the Treasury's continued persecution of beer and pubs in Britain since the 1990s and we believe it is no coincidence that concerns around higher strength drinks have mushroomed over the same period.

Related topics: Legislation

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