Brewers, wine suppliers and distillers are urging the UK Government to abandon plans to increase duty tax on their drinks in the upcoming 2011 Budget.

Both the British Beer & Pub Association (BBPA) and the Wine & Spirit Trade Association (WSTA) warned that the drinks industry will struggle to absorb any further duty tax increases amid a tough economic climate.

The Government plans to increase duty tax on beer, wine and spirits by 2% above inflation in its 2011 Budget, to be announced in March. Its policy is a continuation of the previous administration's tax escalator on alcoholic drinks.

Consumer price inflation is currently running at around 4%, which would mean 6% rises in drinks tax in real terms. Value added tax, meanwhile, rose from 17.5% to 20% in January.

"The scale of tax rises on wine and spirits in recent years has cost thousands of jobs," said the WSTA's chief executive, Jeremy Beadles.

The BBPA claimed that freezing duty tax in the Budget would, conversely, raise an extra GBP40m (US$64.4m) in tax revenues for the Government. The trade body commissioned research by Oxford Economics on the issue. It added that pub closures are running at 29 per week in the UK.