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UK: British Beer & Pub Association calls for tax freeze

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The British Beer & Pub Association has warned of thousands of job losses if the UK Government raises beer duty tax in its upcoming 2011 Budget.

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The trade body has kick-started its lobbying campaign ahead of the Budget, to be announced in March, and is confident that the Coalition Government is sympathetic towards the UK pub industry.

Ministers currently plan to continue the previous Government's policy of a 2% above-inflation rise in wine, beer and spirits duty tax in the annual Budget. But, the British Beer & Pub Association (BBPA) today (4 January) called for a freeze on beer duty.

It argued that that this month's rise in value added tax (VAT) from 17.5% to 20% will add GBP0.06 to a pint of beer, taking the price of the average pint above the GBP3 (US$4.6) barrier for the first time. The VAT increase alone could cost almost 9,000 jobs related to beer sales and a further rise in March will have an even worse effect, according to the BBPA, which cited research by Oxford Economics.

"These further planned duty increases will cost the Treasury GBP40m in reduced tax revenues and lead to another 10,000 job losses," said the BBPA's chief executive, Brigid Simmonds. "The Government has recognised that tax increases harm pubs, and wants policies that don’t damage the sector," she said. "Now is the time to translate this wish into action."

In the third quarter of 2010, beer sales registered the worst quarterly decline in volume sales in BBPA records.


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