Drinks body issues ‘fair duty’ demand

CALLS by a major drinks industry body for a fairer system of taxing beer which, it is claimed, could help create nearly 30,000 jobs and deliver a much-needed boost to the Treasury’s coffers, received a warm welcome in East Anglia yesterday.

In a submission to a Home Office consultation on reform of licensing laws, the British Beer & Pub Association (BBPA) said that a new system of taxing all alcoholic drinks according to their strength would be a “win-win”, benefiting the industry and the Government.

The thousands of jobs which fairer taxation of beer would help to create would bring in around �240million in extra revenue from Income Tax, National Insurance and Corporation Tax, the BBPA claimed.

Beer is already charged in bands, according to its strength, but the average level charged is higher than that imposed on other types of drink.

Quoting research by Oxford Economics, the BBPA said that alcohol in the form of beer currently costs 42p per unit on average compared with 38p for gin, 37p for vodka and 33p for cider.

The research also indicates that about 29,500 jobs would be created, mostly in pubs and the hospitality sector, if the duty system was rebalanced between different types of drinks, with the duty rate for different types of drinks increasing with strength.

BBPA chief executive Brigid Simmonds said a fair deal for beer “would create a win-win situation for all”.

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“The new Government now has a great opportunity to bring fairness into our duty system, with huge potential benefits for the Treasury and the UK economy,” she said.

“We’ve had many years of duty changes that have favoured other categories of drink, yet taxing beer fairly would create thousands of new jobs, and substantial extra tax revenues.

“Beer is also a low alcohol drink of choice and should be treated differently to other stronger alcoholic beverages.

“There is potential for a huge success story that could be grasped by the new Government. Everyone would benefit from a new and fair approach.”

Dick Burge of brewer Nethergate, based at Pentlow, close to the Essex-Suffolk border, near Sudbury, backed the call.

“Beer is unfairly taxed,” he said. “Until the rate of duty was left unchanged in the last Budget, it had risen 27% in two years, which is an enormous increase.

“It has been another nail in the coffin for many small country and community pubs, which are affected by increases in beer prices far more than the price of other types of drink.

“I would welcome a system based on the strength of all drinks. It would seem fair and sensible.”

Drinks giant Diageo, whose portfolio includes Guinness and a host of leading brands of spirit such as Johnnie Walker, Smirnoff and Captain Morgan, also yesterday proposed a staged reform of excise duty based on alcoholic strength.

Simon Litherland, managing director of Diageo Great Britain, said: “Our recommendation to the Treasury is the fairest and most transparent way to approach taxation of alcohol. It will bring revenue to the Government and will mean that the more alcohol in the drink, the more tax it will pay.”