Brewers slam Osborne's beer taxes
A London breweries association has accused the chancellor of playing a “sleight of hand” in the Budget and warned pubs will continue to close.
The price of a pint is set to go up by more than 5p, even though George Osborne told the House of Commons there would be no change in alcohol duty.
However, this means that rates will increase by two per cent above RPI inflation and see prices rise by five per cent from next week.
London Brewers Alliance spokesman Paddy Johnson said: “The chancellor has yet again played a sleight of hand. When he says no change (in the duty on alcohol), what he means is that the ongoing duty escalator, i.e. increases that are well above the rate of inflation, will continue.
“My understanding is that this will put a staggering seven per cent on duty for beer this year alone, bringing the total to 42 per cent since this policy was introduced in 2008.”
Johnson said the duty escalator was “ludicrous and totally unsustainable” and warned it would cause beer sales to fall and pubs to shut down.
“Ironically, the fall in sales is almost outstripping the increases in duty rate so that the net effect for the government is not what they want,” said Johnson. “Worse still, it is affecting most of all the area of alcohol consumption this is most acceptable in terms of responsible drinking - pub sales.”
Johnson said Osborne would have been wiser to target taxes at those who drink irresponsibly, which in turn could help the British pub trade.
He said: “Alcohol duty needs to be targeted at problem areas, such as cheap spirits for ‘pre-loading’ and, indeed, minimum pricing to prevent supermarkets from selling alcohol at prices that cannot be justified under normal economics. Likewise, the much-maligned pub trade needs real measures to help it, including breaks on VAT for hospitality.”
London brewer Fuller’s chairman Michael Turner believes taxes on beers are crushing one of the last proud British industries.
Turner said: “By continuing with the duty escalator, the chancellor has defied logic to heap a further tax burden on one of this country’s most valuable industries.
“With beer duty rising again by two per cent above inflation, we could see up to 5,000 jobs disappearing from our industry in the next year - and 16,000 jobs over a three-year period.”