UK: Trade body laments beer 'stealth' tax

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The British Beer and Pub Association has complained that the Government is implementing a "stealth tax" on the sector.

An average pint of beer will rise by at least GBP0.06 in price following yesterday's pre-Budget Report, the British Beer and Pub Association has said.

It criticised chancellor Alistair Darling for returning value added tax to its 17.5% rate, while maintaining beer excise duty at its current level.

"The industry had to endure an 8% increase in beer duty last December, which cancelled out the VAT cut [to 15%] enjoyed by every other sector," said BBPA chief executive Brigid Simmonds.

"Since the Budget of 2008, our tax bill has gone up by GBP600m during one of the deepest and longest recessions in living memory.  Taken together, this amounts to a stealth tax on brewers, pubs and their customers."

Figures released in the pre-Budget Report show that the Government has made GBP300m (US$488.5m) more than expected from alcohol sales in the current tax year.

All alcoholic drinks sectors saw tax rises 12 months ago in an effort by the Government to offset earnings from the VAT cut.

Drinks duty tax is set to rise by 2% above inflation in the next UK Budget, to be announced in April 2010.

Some drinks industry leaders were more sanguine on yesterday's announcement.

"Today's confirmation that these tax increases will remain in place is disappointing for the trade and the millions of British consumers they serve, though sadly it is not surprising given the state of public finances," said Jeremy Beadles, chief executive of the Wine & Spirit Trade Association.

Yesterday, UK pub chain Pubs n Bars collapsed into administration, highlighting a tough time for the country's on-trade.

Sectors: Beer & cider

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