Chancellor needs to ‘support not penalise industries’
The British Beer & Pub Association (BBPA), the Scotch Whiskey Association and the Wine & Spirits Trade Association wrote to the Chancellor, calling for support.
Earlier this week (Monday 17 October), new Chancellor Jeremy Hunt announced the planned freeze on alcohol duty increases had been scrapped.
Huge blow
At that time, BBPA boss Emma McClarkin said this was a “huge blow” to brewers and pubs as a freeze would have delivered a £300m saving to the sector, at a time when it desperately needs any relief it can get to help keep a lid on spiralling costs and keep the price of a pint affordable for pubgoers this winter.
Furthermore, Night-Time Industries Association (NTIA) chief executive Michael Kill warned the trade was facing one of the toughest winters in history.
Double-digit rise
Appealing to the Chancellor, the drinks trade bodies highlighted the importance of pubs and hospitality businesses keeping their prices affordable.
A joint statement from the trio of bodies said: “The reversal of the duty freeze will mean a double-digit rise for beer, wine and spirits, which combined together contribute £13bn to the Exchequer through duty alone.
“For hard-pressed consumers, this will mean a significant increase in the price of their favourite drinks at a time when our pubs, restaurants and shops are all struggling to manage increasing costs and keep their doors from shutting for good.”
The letter in full:
Dear Chancellor,
As organisations representing the UK’s world-class drinks producers, pubs and retailers, we welcomed the duty freeze announced by HM Treasury just 26 days ago. It underpinned the investment our member companies are making across the UK, supported hundreds of thousands of jobs and gave our industries stability and confidence at a time of rising energy costs, Covid recovery, supply chain pressures and fragile consumer confidence.
That stability has now been shaken and confidence lost due to the U-turn announced on Monday.
The reversal of the duty freeze will mean a double-digit tax rise for beer, wine and spirits – industries that together contribute £13bn to the Exchequer through duty alone.
For hard-pressed consumers, this will mean a significant increase in the price of their favourite drinks at a time when our pubs, restaurants and shops are all struggling to manage increasing costs and keeping their doors from shutting for good this winter.
It is vital a drink with family and friends, in pubs and hospitality venues serving their communities in every part of the UK does not become an unaffordable luxury.
It doesn’t have to be this way. Over the past five years, during a stable period for alcohol duty, revenue has increased by 18%.
In 2017, the Office for Budget Responsibility forecast revenue would increase by just 13% over the same period.
Despite the challenges of Brexit, punitory tariffs and a global pandemic, our sectors have continued to deliver increased revenue to the Exchequer because of, not despite, duty freezes.
Now is the time to support our industries – not let us pay the price for ‘going too far, too fast’ in other fiscal measures.
We call on you to support, not penalise our industries – protect the jobs we create, back the investment we attract and to cancel to double-digit tax hike.
