Budget 2013: Industry reacts to the scrapping of the beer duty escalator

Brigid Simmonds, British Beer & Pub Association chief executive ​

“This is absolutely brilliant news, and it will make George Osborne the toast of Britain’s pubs today. By cutting the tax on beer, he has moved to boost jobs in Britain’s pubs at a time when it is most needed. In also abolishing the Beer Tax escalator, the Chancellor has ended a hugely damaging policy that would have made Britain’s’ beer the most heavily taxed in Europe. This will protect thousands of jobs this year, and will allow us to create many new jobs in this brilliant industry.

I want to pay tribute to the hundreds of thousands of people who have supported this campaign. This has been a broad and persuasive campaign uniting the industry and consumers. I hope this heralds the start of a long term change that recognises the benefits of beer and pubs, for the economy, and for society.”

ALMR Strategic Affairs Director, Kate Nicholls​

“The Chancellor’s scrapping of the beer duty escalator and cut in taxes is good news for Britain’s pubs and bars – and long overdue.

"George Osborne said he wanted to back sectors which are global successes and free up major employers – and that is precisely what we represent.  Britain’s pubs and bars generated 1 in 8 of all new jobs last year, we’ve delivered 8% growth year on year in GDP and the value we add to our local economies and communities and it is time that was recognised and supported.

"This goes some way to re-dressing the balance but there is a still a long way to go level the playing field with the supermarkets and across all products. With 70% of alcohol now sold and consumed away from the responsible, supervised environment of the pub, we need to make sure that this is the start of a more healthy dialogue about the positive role pubs can play. 

"We warmly welcome this positive move and look forward to the tax cut being passed on in full by producers and suppliers to allow us to deliver it to our customers on Sunday – as the Chancellor asked us to.”

"The outcome is the culmination of a long campaign and collaboration between all sectors of the industry, consumers, producers and retailers. The ALMR​ pays particular tribute to the work of Andrew Griffiths MP, Chair of the All Party Parliamentary Beer Group, in keeping this issue at the forefront of the political debate."

Save the Pub Group chairman and MP Greg Mulholland​

“Following all the hard work by so many groups, including CAMRA, to see the beer duty escalator scrapped in the 2013 budget, I am absolutely delighted that the Chancellor, George Osborne has today listened to the arguments against this unfair tax and brought it to an early end and reduced beer duty by 1p. This will be a boost to claims of being a pro pub Government.

“It has been evident to see that as a result of the reduced duty under the Small Breweries Relief we now have a thriving brewing industry, with over 1,000 breweries in the UK, the most the UK has seen for over 70 years. This clearly shows that lower duty leads to growth, investment and jobs in the brewing sector and I am delighted that the chancellor has today made a vote of confidence in Britain’s breweries.

“It is also good news for pubs, as supermarkets were able to absorb the increase in the price of beer, pubs were simply not able to and this was further increasing the difference between a can in the supermarket and a pint in the pub, which is a controlled and sociable environment. So I am delighted that it has today being brought to an end.

“It is now essential that the benefit of scrapping the escalator are passed on to pubs, so we now want to hear from all the large pub owning companies that they pass this on to licensees by looking at their own prices lists which will help publicans and help pub customers”.

CAMRA, the Campaign for Real Ale, chief executive Mike Benner ​

“This is a momentous day for Britain's beer drinkers, who will tonight be raising a glass to the Chancellor for axing this damaging tax escalator and helping keep pub-going affordable for hard-pressed consumers. This decision will keep the lid on the cost of a pint down the pub.

“Since the duty escalator was introduced in 2008, 5800 pubs have been forced to call last orders for good. What could have been the final nail in the coffin for our pubs has been decisively avoided by the Chancellor in a move that will spark celebration in pubs across the UK.

“Scrapping the beer duty escalator, combined with a 1p cut, is a massive vote of confidence in British pubs and will lead to an increase in pub going and more money in the Chancellor’s coffers.

“Today’s decision is a huge triumph for CAMRA’s pub campaigners who have been building overwhelming public support for a fair deal for beer and pubs, pub by pub and beer festival by beer festival. Over 108,000 consumers signed an e-petition and more than 8,000 consumers have written to their MP calling for a fair deal for beer and pubs. A Mass Lobby Day organised by CAMRA saw over 200 MPs meet with their constituents who highlighted the severe damage caused by the escalator.”

Tim Hulme chief executive of BII​

"This is fantastic news and is a strong endorsement by the Chancellor of the valuable contribution this industry makes.

 “Not only will this help safeguard the industry's current workforce – from front-line staff to those in production, logistics and across the board – but it reaffirms the strong position this industry holds. It is recognition of the major contribution our sector makes to wider employment, economic growth and development."

Fair Pint​

"Fair Pint congratulate Greg Mulholland and CAMRA who spearheaded the hard fought campaign to scrap the beer duty escalator and cut beer duty, the first stage in lowering the price of beer to pubs.  Whilst good news for the brewers the benefit of this tax concession will be fruitless unless it is passed on to the nations publicans. Beer duty is a brewers tax.

"In the 80 years duty has been around the brewers have passed this tax burden on to publicans. We now call on them to pass on the benefit otherwise the Governments tax initiative will have been simply pocketed by the brewers and will have no meaningful effect on the pub sector. It is now for the brewers to take the next step and offer the industry a clear statement that the tax concession will be passed on to pubs. 

"The combination of beer duty concessions passed on to pubs and more importantly the Government's proposed statutory code, ensuring a tied licensee is no worse off than they would be if they could buy beer in an open and competitive market place, could be a turning point in the pub industries misfortunes."

Steve Magnall, managing director of Thwaites Beer Co​

“We welcome the Chancellor’s decision to abolish the beer tax escalator. Since it was introduced in 2008, tax on beer has gone up by a staggering 40 per cent. This has had an adverse effect on the sector with record numbers of pubs closing and landlords and their staff losing their jobs and livelihoods.

“Any steps made by the government to encourage people back in to pubs where they can drink in a controlled environment is good both on a social and business level.”

Chris Keating, Wychwood Brewery Manager​

"The government has stopped scoring own goals – hitting the normal hard working man from enjoying a pint in his local.

"A petition launched by Hobgoblin a year ago reached 100,000 signatures before Christmas - one of only 20 e-petitions ever to do so.

The campaign attracted support of CAMRA, SIBA,BBPA and other beers but most importantly it made sense to the drinkers who never really understood the wording cleverly written by Whitehall Mandarins “The duty escalator remains” – which should have read – Your pint goes up 2% above inflation every year – (because we can).  A victory for the hard working, pub going regular man of Britain - get down to your pub and celebrate today."

SIBA chairman Keith Bott​ 

“We are delighted that the Chancellor has listened to the many voices calling for an end to the duty escalator – and then gone one step further by cutting a penny off the pint. It will be universally applauded by the cash-strapped drinkers, struggling licensees and a growing number of MPs across the divide who have campaigned long for this. 

“A pint of beer should be an affordable pleasure rather than an occasional treat, and by stopping the escalator and taking a further penny off a pint,  the Government is ensuring that draught beer – a relatively low-alcohol drink – remains Britain’s favourite tipple, as it has been for centuries.  

“This move will generate growth and jobs in brewing, one of Britain’s few remaining manufacturing industries, and in pubs - both sectors that employ high numbers of young people. The revenue to the Treasury from this investment will far outweigh whatever they might have earned from beer duty.”

“Local brewers benefit from Government investment in the form of Small Breweries’ Relief, which enables them to invest for growth, resulting in a 25% increase in the number of people working in the sector last year.  We hope that this beer-friendly Budget from a Chancellor who clearly has been listening to the industry and to drinkers, will help pubs to thrive again at the heart of their local communities.”

Michael Turner, Chairman, Fuller, Smith & Turner​

"I would like to congratulate the Chancellor on this initiative. It will be excellent news for British manufacturing, British farming, British pubs and British jobs."

James Shorthouse, head of licensed & leisure at Colliers International​

“After months of lobbying, the Chancellor has finally listened to the united voice of the industry, consumers and the media to come up with a welcome measure of good news in these difficult times.

“The decision to raise the Tax Personal Allowance to £10,000 will also help the lower paid in particular, for whom a couple of pints in their local pub is one of life’s few affordable luxuries.”

Simon Dodd, Orchid commercial & people director ​

“Scrapping the duty escalator and the ‘penny off the pint’ is a rare giveaway amid the economic gloom of today's Budget.

"We wish the government had gone further however, with a reduction on VAT as adopted by both Ireland and France.  Another easy win would have been to make supermarkets stop using alcohol as a loss leader, and instead cut the prices of essential fruit and vegetables instead. This would not only help the pub industry but help tackle obesity at the same time.

"On a different note - we are glad to see Mr Osborne acknowledge the power of apprenticeships – at Orchid we believe this is crucial to reducing unemployment and supporting our youngsters starting out on a rewarding career path.  During 2013 Orchid will be further committing to our apprentice scheme with over 200 places in the next 12 months."

Jonathan Neame, Shepherd Neame chief executive​

“It is fantastic to see the government recognise the importance of British beer and pubs. By scrapping the beer duty escalator – and then reducing beer duty by a penny a pint – the Chancellor has provided a great boost for the sector.

“British beer was on course to become the most heavily taxed in Europe which, in turn, would have put an unsustainable burden on the country’s brewing and pub sector. Today’s announcement is a clear statement that the government recognises the industry’s valuable contribution to both the economy and society at large.

“We must thank our customers, our licensees and campaign groups across the UK for their support in helping to show our industry’s vital role and potential for the future.”

Steve Goodyear, chief executive of Youngs​
"Today's announcement to scrap the beer duty escalator is a real boost not just for the pub industry but for those areas that benefit from having a thriving local pub at the heart of their community."

Simon Cox, managing director UK & Ireland of Molson Coors​

“This cut in beer duty is a very welcome move to help get a great British industry back into growth. We are pleased the Chancellor has listened to Britain’s beer drinkers and we are grateful to our local MP, Andrew Griffiths, for his tireless efforts to champion beer."

Nigel Wright, chief operating officer of TCG​

“It’s welcome news that we will be cutting beer prices for our customers. Consumer confidence is fragile and we were already looking at ways we could absorb part of the expected duty increase in some of our local and community pubs rather than pass it on in full. It sounds as though the Chancellor has listened to the pub trade’s concerns that the role of pubs as an important community asset, as well as a major employer, needs to be supported.”

Stefan Orlowski, managing director, Heineken​

"The news today from the Chancellor provides a much needed boost for beer drinkers and the great British pub. The end of the beer duty escalator and a cut of 1p a pint will go a long way to helping secure jobs in our industry; and preserving the pleasure of a hard earned pint at the end of the day. We will pass this duty saving on to all our customers as soon as it becomes effective."

Gary Haigh, managing director of Miller Brands UK​

“We’re delighted the government has acknowledged the contribution that beer and pubs can make to driving economic growth.”

Diageo ​

“This move is disappointing. Cutting duty on beer while increasing it on spirits punishes the UK spirits industry for its success in this harsh economic climate. Scotch is the UK’s biggest food and drink export. This move risks that success.”

Simon Cox, UK MD & Ireland, Molson Coors​

“This cut in beer duty is a very welcome move to help get a great British industry back into growth. We are pleased the Chancellor has listened to Britain’s beer drinkers and we are grateful to our local MP, Andrew Griffiths, for his tireless efforts to champion beer."

Andy Slee of Punch Taverns​

“Our customers will be raising a glass to the Chancellor following today's welcome decision to scrap the beer duty escalator and knock a penny off a pint of beer.

 "Osborne has delivered a welcome break for pub landlords. But that good work could be undone if the government presses ahead with more bureaucracy and legislation on an already hard pressed pub sector."

Simon Theakston T&R Theakston​

“This is absolutely brilliant news.  ​I never thought I would see the day when I would be actually pleased by a Chancellor’s announcement about beer duty. By cutting the beer tax, he has given a massive boost to job prospects in Britain’s pubs at a time when it is most needed.
 
“In also abolishing the Beer Tax escalator, the Chancellor has ended a hugely damaging policy that would have made Britain’s’ beer the most heavily taxed in Europe. it will protect thousands of jobs this year, and will allow us to create many new jobs in one of the Country's proudest home-grown industries.
 
“I would like to add my tribute to the huge number of licensees and members of the public who have supported this campaign; a Campaign which has united the industry and consumers and will start the much needed long term change that recognises the benefits of beer and pubs both urban and rural, for the economy, and for society. I shall be celebrating this evening with a pint of Yorkshire's finest!”

Bruce Ray, corporate affairs director for the Carlsberg UK​

“The chancellor’s announcement today about the abolition of the beer duty escalator and the reduction of 1p from beer duty is fantastic news and a widely welcomed measure for everyone involved in the beer and pub industry.  The abolition of the beer duty escalator will save jobs and preserve pubs, which are so often at the heart of our communities. 

“As an industry, many different stakeholders have worked together to achieve this momentous decision.

“We are pleased the government has listened to the points put forward by our industry, and not let beer become and unaffordable luxury.”

Tony Jennings CEO of Budweiser Budvar UK​

“The first tentative step to repairing the horrendous economic damage  that successive governments have done to the pub trade and the brewing industry. I think the Chancellor finally realised that he was in real danger of killing the goose laying the golden eggs”.

Julian Jennings leisure partner at Gerald Eve​

“We think it will bring some welcome relief, if only in a small way, for the pub, bar and brewing sector, and particularly for individual licensees and small businesses with drinks-led pubs in local communities .

“It is also pleasing  to see the Government recognising and empathising with the impact that statutory beer price rises have on the viability of smaller pub businesses and local brewers.”

Brakspear chief executive Tom Davies ​

“I’m sure all our tenants and their customers will be raising a glass to the Chancellor’s excellent decision to scrap the beer duty escalator and take a further penny off the price of a pint.  We will still be paying one of the highest one of the highest rates of beer taxation in Europe, but it’s certainly a move in the right direction.

“Before last year’s Budget, we ran a Tax Free Beer Day in 10 of our Henley pubs, reducing the price of a pint by £1.30 and collecting 1,000 signatures from customers for an end to the escalator.   While today’s announcement doesn’t enable od to reduce beer prices by £1.30, even a penny off a pint will be appreciated by cash-strapped pubgoers.

“This is a welcome first step towards helping pubs to thrive again. Successful pubs contribute to their local economies and provide much-needed employment, particularly for young people.  Given this Government’s Big Society ideals, we’re surprised that more has not been done to restore pubs as centres of their local communities and we look forward to more help in future.”

Paul Bartlett, chair of the NACM​

"We welcome the news that the Chancellor believes the duty escalator is flawed, but we are disappointed he has decided to remove it just for beer.

"We look forward to having the opportunity to discuss with government the removal of the duty escalator for all alcohol, including cider.

"Cider makers will recognise the benefit for a hard-pressed pub industry from this move. As vibrant pubs have a drinks offer much broader than just beer, the abolition of the escalator for all alcohol would have gone further."

David Hawksworth, president of Federation of Licensed Victuallers Associations​

"It's great news that the beer duty escalator has been scrapped. It is the nicest bit of news in the licensed trade for a long time."

Stephen Broome, hospitality and leisure specialist at PwC​

"The news that the Chancellor is scrapping the beer duty escalator and reducing beer duty by 1p a pint will be very much welcomed by both the trade, the consumer and the many lobby groups that have been appealing for a change in tax policy.

"It may go some way to reversing the 17% decline in beer consumption that has occurred since the escalator was first introduced in 2008 and this in turn may lead to further jobs in the sector.

"However, the decision to retain the escalator on other alcoholic drinks, including spirits such as whisky, is likely to be a dampener on any excessive celebrations.

"Time will tell whether the change is enough to slow the rate of pub closures, but for the hard-pressed beer drinker this good news should bolster consumer confidence after a glass or two."

Colin Neill, chief executive of Pubs of Ulster​

“Pubs of Ulster welcomes today’s Budget announcement and the chancellor’s decision to scrap the beer duty escalator, as it marks a significant victory for the industry. 

 ​“Pubs of Ulster has lobbied extensively to bring an end to the beer duty escalator - which allows duty to increase automatically by 2 per cent more than inflation every year.  Since 2008, the escalator has brought about a staggering 42% increase in taxation.  The impact on the industry each year has been significant, with many within the trade citing the escalator as a key contributor to pub closures.  As the representative body of the industry locally, Pubs of Ulster took the campaign to abolish the duty escalator to Westminster.  Following extensive discussions with our local MPs, the shadow pubs minister and the chairman of the All-Party Parliamentary Save the Pubs Group, the voice of the industry has been heard.

 “Whilst we welcome today’s announcement and see it as a significant step forward, the end of the escalator doesn’t repair the damage already done to the trade over the last five years.  We must also remember that the chancellor still plans to increase all other alcohol duty and we can therefore expect an increase in the price of wine, spirits and cider. 

 “However, we must recognise that today’s announcement could mark a turning point for the industry.  It also shows that Westminster has now recognised the value of the pub and the vital role it plays in the economy.  We would now call on Stormont to do the same.”

James Staughton, Chairman of the Independent Family Brewers of Britain​

 "It is fantastic to see the Government recognise the importance of British beer and pubs.  George Osborne's announcement to reduce beer duty by 1p per pint and scrap the beer duty escalator is great news for the British brewing industry, particularly Family Brewers for whom brewing is the mainstay of their business.  This news also impacts the 38,000 people currently employed with the Family Brewers, who rely on the brewing industry for their livelihood.

 “We are grateful to the 100,000 pub goers who signed the e-petition to scrap the escalator and the support of local MPs for our campaign.

 “Beer duty has increased by a massive 42 per cent since 2008 so this is welcome relief from the tax burden Family Brewers face.  Family Brewers’ members and employees contributed £496.5m to the UK economy last year between excise duty and VAT.

 “I am confident that this move will help stimulate economic growth and employment in our industry.”

Food and Drink Federation director general Melanie Leech​

“Many of the measures in today’s budget and the recently adopted ‘single pot’ proposals from Lord Heseltine support our vision shared with Government to grow the sector by 20% by 2020.

 “The new employer allowance will significantly lower food and drink SMEs National Insurance bills and give those businesses greater certainty when considering whether to invest in growth while the announcement of a further cut in Corporation Tax and the cancellation of the rise in fuel duty planned for September will be welcomed across the industry.”

 “FDF also welcomes the support for the Agri-tech strategy, one of 11 key sectors that will benefit from £1.6bn of funding. Implementing the strategy through a whole-chain approach lead by senior figures from the across the food industry will increase its reach and chances of success.

 “The increase to the above the line research and development tax credit to 10% also sends a clear message that the UK welcomes investments in innovation. However for SMEs, which form the backbone of the UK’s food and drink sector, the scheme remains complex and inaccessible.

"FDF will continue to argue for more flexibility in the definitions of innovation and the way they are applied so that these businesses can accelerate their growth while playing a full part in improving public health and reducing their impacts on the environment.”

Stephen Gould, managing director of Everards brewery​

“This is absolutely fantastic news, both for our licensees and their customers. We have been involved in the campaign against the duty rise from the start and are delighted that it has been successful.

“The pub trade has been a challenging industry now for a number of years and the anticipated rise in duty would have made life extremely difficult for all employed within it. By cutting the duty on beer, the government is finally showing its support for an industry, which directly or indirectly provides around 1.75 million jobs in the UK. In abolishing the beer tax escalator, we hope that the government will now continue this support in coming years.

“This really is great news for drinkers, for those employed in the industry, for UK towns and cities and for the economy as a whole.”

David Grant, managing director of Moorhouse’s Brewery​

“The great work which bodies such as Camra and SIBA have done and the mass protest in London last year has meant the industry cannot be ignored any longer.

“The insidious duty escalator was a stealth tax on the brewing and pub industry. It is great news that it is gone. It was due to run until next year, so, combined with the 1p off, the scrapping means that 11p should be saved on a pint of full duty paid beer over the next two years.

"This will be a real help for the consumer and pubs in these extremely difficult times. It is the first time for many years that a Chancellor has acknowledged the importance of the brewing industry to the economy.

“Publicans will not benefit from a full 1p a pint reduction in the price of pint from small brewers simply because of the progressive beer duty relief for them – so pubs can’t pass this on. But it does mean publicans should have more money to invest in their businesses to encourage trade, which is much needed in these dire economic times.”

Scott Waddington, Brains chief executive​

“This is excellent news for the British beer and pub industry in general and specifically for brewers and pubs in Wales. As Wales’ leading brewer and pub retailer we are delighted that the Chancellor George Osborne has taken this action.

"By cutting the tax on beer, he has moved to boost jobs in Britain’s pubs at a time when it is most needed. Today’s cash strapped consumer will be able to enjoy a pint at better value than before in the safe, supervised and sociable environment that the pub provides.  

“In also abolishing the Beer Tax escalator, the Chancellor has ended a damaging policy that would have made Britain’s’ beer the most heavily taxed in Europe. This will also be reassuring news for pub consumers and should protect and create new jobs in the industry going forward.

 "At Brains, we hope this heralds the start of a long term change in attitude that recognises the benefits of beer and pubs for the economy, and for society as a whole’’.

Zolfo Cooper partner Paul Hemming ​

“The headline-grabbing move by the Chancellor to scrap the alcohol duty escalator in relation to beer, and in fact reduce duty by a penny, is good news for pubs and brewers and should be welcomed. It means that instead of being faced with the prospect of having to further raise the price of a pint of beer – by 6p or 7p – pubs can now contemplate holding prices at current levels.

"However, while there was also positive news for the leisure sector and the wider economy in other areas of the Budget – such as the scrapping of a planned fuel duty increase – it is disappointing that the duty escalator remains in place for other alcohol categories, putting further pressure on the struggling on-trade.

"The issue is that the Chancellor has done nothing to curb the price gap between pubs and the grocery channel – at best he has maintained the gap for beer, and exacerbated the differential for other alcohol products. This is by far the bigger issue, and one which will fuel home drinking and continue to hurt the hospitality sector."

Keith Bott, managing director of Titanic Brewery​

“The Beer Tax Escalator has led to a huge rise in duty over recent years and inevitably some of that had to be passed on to customers.

 “As of 12 noon on Tuesday we will be cutting prices on our own beer by 5p – and we hope other brewers follow suit.

 “We recognise that times are hard and are thrilled that our customers have remained loyal during the economic slump.

 “Often companies, in other industries, are accused of putting prices up when taxes raise but not reducing them when the opposite happens. We want to share the good news with our customers.

 “Mr Osborne’s constituency is just up the road in Cheshire and maybe he will get off his train from Westminster in Stafford or Stoke and join us for a pint of locally produced beer.”