Drinks sector calls time of Government duty strategy

Drinks sector calls time of Government duty strategy

Drinks trade bodies have reacted with widespread disappointment to news that UK Chancellor Alistair Darling will raise duty tax on drinks for the fourth time in two years.

Misery, disappointment and "flawed" are just three of the words that have been used by industry today (24 March) to describe reaction to the Government's duty tax plan.

Chancellor Alistair Darling will raise tax on all drinks, as planned, by 2% above inflation from midnight on Sunday (28 March).

The move means that tax on beer and wine has risen in real terms by 25% in the last two years, with spirits tax up 20% in the same period. Darling further announced that drinks tax will rise by 2% above inflation every year for at least the next four years.

He also today slapped a 10% above inflation tax rise on cider, which has escaped hikes in recent years, in order to "correct a long standing anomaly".

"Successive punitive tax rises on alcohol are taking their toll on household budgets and mean further job losses in the drinks industry are on the cards this year," said Jeremy Beadles, CEO of the Wine & Spirits Trade Association (WSTA) today.

"The last year alone has seen business closures and 30,000 job losses," he said.

"The Chancellor’s duty escalator policy is totally misguided," said Scotch Whisky Association CEO Gavin Hewitt.

"The policy has failed," he said, adding: "Revenue from spirits to the Treasury fell by £49m in 2009. Today’s duty rise by a Scottish Chancellor will not secure the increased revenue that he is looking for and undermines an industry that brings massive economic benefit to Scotland."

Brigid Simmonds, CEO of the British Beer & Pub Association, said: "This latest beer tax hike piles on the misery for Britain's hard-pressed pubs and beer lovers."

She accused Darling of jeopardising green shoots of recovery in the pub sector.

"Since 2008, beer tax has increased by an eye-watering 26% – a GBP761m tax rise - and we have seen the loss of 4,000 pubs and over 40,000 jobs up and down the country. Beer sales are down GBP650m in the last year alone,” said Simmonds.

“The Chancellor cannot have it both ways,” said Edwin Atkinson, director general of the Gin & Vodka Association.

"The average tax on a bottle of spirits sold in the supermarkets was already 70% before this Budget," he said.

Click here to view the Budget figures at-a-glance.

Click here to read our comment on the cider tax rise.