Beer duty cut could create £26.6m extra spending on draught beer

06-Mar-2020 - Last updated on 06-Mar-2020 at 15:04 GMT

Cutting duty: CAMRA’s new research highlights how a reduction on draught beer duty would benefit pubs and the Government

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New research has highlighted the importance of introducing a preferential rate of duty for draught beer as previous freezes have simply allowed the supermarket to undercut the pub with cheap alcohol.

Research from the Campaign for Real Ale (CAMRA), conducted by Europe Economics, underlines the benefits of such a measure because it would help move consumption from the off-trade to the on-trade.

The insight showed that cutting draught beer duty by 5% would create £26.6m of additional spending on draught beer and 38% of this increase would be beer that would have been consumed in bottles or cans before.

And now, as the UK has left the EU with a Government that does not have to conform to EU legislation anymore, a move to specifically support pubs with a preferential rate of duty can be considered.

Radical proposal

CAMRA national chairman Nik Antona said: “A preferential rate of beer duty on draught beer is a radical proposal that will really help to save our pubs.

“This research is an important piece of work that demonstrates how much it would cost for the Government to take real action and show its commitment to a great British institution.

“We are delighted at the support shown by MPs, which will help us keep the pressure on the Chancellor ahead of the budget.”

The research also showed a 5% reduction in draught beer duty would also be cost-beneficial for the exchequer compared to freezing or cutting beer, spirit and cider duties and that cutting draught beer duty is an effective way of creating additional employment in the on-trade.

Leaving the EU

Giles Watling MP, who sponsored the event in parliament and is backing the proposal, said: “Pubs are important community assets and we need to do all we can to protect them. Unfortunately, previous freezes in beer duty, while welcome, have also allowed the supermarket to continue undercutting the pub with cheap alcohol.

“That was because of single market rules, which equalised rates between pubs and supermarkets. Now we have left the EU, I want to change that and differentiate the rate of duty so that it finally benefits and supports our pubs.

“The event in parliament allowed us to educate parliamentarians on this proposal and I am glad so many colleagues took the time to show their support.”