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In This Issue...
There was a chorus of grumbles from the UK drinks industry last week after the country’s Chancellor, Gordon Brown, outlined his Budget for the next 12 months.
If you aren’t aware of the details, the Chancellor introduced index-linked increases to duty on beer, cider and still wine – and froze the tax on spirits. Brown levied a steeper tax hike on sparkling wine, a move that provoked an outcry from a surprised wine industry.
While distillers raised a glass to the Chancellor, there were public complaints from sections of the beer and cider industries, with brewers calling the duty increase “a slap in the face” as they prepare for the imminent smoking ban in the UK.
But, let’s face it, the situation could be worse. Late last year, Brown faced a call from one of his high-profile Government colleagues to “really increase taxes” on alcohol to curb “binge drinking” in the UK.
What’s more, in the aftermath of the Budget, sections of the media criticised the lack of targeted action from Brown on alcopops (RTDs to us in the trade).
And on Friday, UK medical journal The Lancet published a study that called for a revamp of the country’s drug classification system. In the study’s alternative system, alcohol and tobacco are classed as more harmful than drugs like ecstasy.
Leaving that particular debate to one side, what is clear is that the Chancellor’s moves on tax should be seen in the context of continued calls for strict action to curb so-called binge drinking. The UK government is often criticised for its supposed lack of action on issues like under-age drinking.
However, tax is too blunt an instrument to tackle social problems that often have deep-rooted societal causes. Binge drinking is more of a behavioural issue – to tax alcohol is besides the point. What is needed, as we all know, is a concerted industry approach to educate consumers as early as possible about the dangers associated with the misuse of beverage alcohol.
Sure, the UK tax increase, particularly on sparkling wine, should not be sniffed at. However, perhaps we should be thankful that the Chancellor refused to yield for the loud calls to slap more duty on alcohol.
Until next time...
Olly Wehring, Managing Editor
The biennial IFE trade show in London has over the years been the initial launch pad for many successful brands and heralded numerous mainstream trends in the soft drinks sector. Annette Farr visited the show for a glimpse into the future.
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