By: Chris Brook-Carter - 23 March 2004 16:45
While many in the UK drinks industry were toasting the release of the government’s long awaited alcohol policy document, which is a dominated in tone by cooperation and self-regulation, it was nursing a substantial headache by the time Chancellor Gordon Brown had finished unveiling this year’s budget. Duty rises on wine and beer were disappointing enough, but the news the spirits industry had failed to persuade Mr Brown of the folly of introducing tax stamps has caused the most concern.
Tax stamps, in one of the world’s most important markets, are without doubt a blow to the spirits industry. Estimated costs have been soften by the proposals Brown has put forward in an effort to sweeten an industry vehemently against the move. Brown said he would "help the trade financially" by deferring payment for the stamps and by helping with capital investment. However, the real cost is still unknown and KPMG analyst Mike Maloney told just-drinks that he feared the often super efficient bottling and labelling processes the spirits industry prided itself on could be thrown out of kilter by the addition of the new process. “The devil will be not so much in the detail but in the implementation,” he said.
That said, the drinks industry as a whole has still emerged, from what could have been a disastrous week, just about ahead. In the face of mounting pressure from anti-alcohol lobbies and medical opinion, the alcohol policy could have been far more draconian than it eventually was, curbing alcohol advertising and calling for hefty tax increases to fight the growing bill alcohol harm runs up each year. And Brown could easily have swept in far larger duty rises than he did, claiming legitimacy on the back of medical opinion.
The drinks industry has not got away lightly, but neither has a long week in Westminster all been in vain.
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