The UK Government is set to raise duty tax on beers with an alcohol content above 7.5% as part of its plan to curb harmful drinking.
Ministers aim to penalise super-strength lagers with the new tax rule, announced today (30 November) to coincide with the Government’s white paper on public health policy. Beers with an abv of less than 2.8% will be rewarded with a reduced duty rate.
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Brewers, pubs and retailers will have to wait until the Government’s 2011 Budget announcement, expected in March or April, to discover the rates for the new duty scheme on beer. It is set to be implemented by autumn 2011.
Most beers sit inbetween the two bands and these, along with wine and spirits, will continue to be taxed at their existing rates. Despite this, the British Beer & Pub Association welcomed what it believes is a sign that the Government is seeking to go easier on lower-strength drinks.
“We are pleased that the Government has decided to reduce duty for beer below 2.8%,” said the BBPA’s CEO, Brigid Simmonds. “This will provide a welcome incentive for further investment in these beers, and encourage people to choose lower-strength drinks.”
Beers above 7.5% abv account for less than 1% of total UK beer sales by volume, according to the BBPA. Those below 2.8% abv are thought to account for a similar proportion of the market.
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By GlobalDataIn its public health white paper, released today, the Government also confirmed that it will pursue “without delay” a ban on alcoholic drinks sales at ‘below cost’ prices, although it did not define what ‘below cost’ means. Ministers will also overhaul licensing laws and there is a plan to charge more for late-night licences.
In January, the drinks industry and the Government are also expected to announce a ‘Responsibility Deal’ that will include industry commitments to fund responsible drinking campaigns and an agreement on labelling.
