October 23, 2012 9:55 am

Pubs warn beer tax is hurting sales

The beer industry has warned that tax revenue will fall and workers could suffer after pubs pulled fewer pints during the summer despite a boost from the Olympic Games and Euro 2012.

Pub sales fell almost 5 per cent during April, May and June compared with the same quarter last year, according to the British Beer and Pub Association. The revenue decline would not only hurt Treasury tax revenue but would cost jobs as pubs continued to close, the trade body said on Monday.

“If the government wants to encourage growth, back British business and support local communities, then it must end the beer duty escalator,” said Brigid Simmonds, chief executive of the BBPA. “The chancellor must listen to the thousands of people now calling for a change, so the sector can grow, create jobs and contribute more to UK plc.”

The association pointed to research from the consultancy Oxford Economics showing that a freeze on duty in the next budget would save 5,000 jobs in the sector.

Campaigners are urging the government to help the industry by freezing the beer duty escalator, under which the tax on alcohol rises by a minimum of 2 per cent above inflation each year.

An online petition calling for the beer tax to be dropped attracted 100,000 signatures in September, reaching the number needed to trigger a parliamentary debate. A committee of MPs will meet on Tuesday to discuss the matter.

“It is a pernicious tax,” said Roger Protz, editor of the Campaign for Real Ale’s Good Beer Guide. “David Cameron has promised to be a pub-friendly government but this government has done nothing to help pubs.”

According to Camra, beer duty has risen 35 per cent since 2008 and during that period the pubs trade has shrunk by about a third. It says the tax Britons pay on beer is the highest in Europe after Finland.

Data from the BBPA showed that supermarket beer sales had also fallen over the summer. It said, however, that despite the 6.5 per cent drop, supermarket and off-licence sales had been broadly stable over time.

The Treasury said it was working to cut Britain’s deficit and while alcohol duties were an important contribution to meeting its targets it had offered help to the industry.

“We have introduced a range of tax measures that will help the alcohol industry and pubs in particular. Cutting employers’ national insurance contributions will make it cheaper for pubs to employ people on incomes of less than £21,000.

“The industry will also benefit from the reductions in corporation tax, fuel duty cut and extension of the small business rates relief holiday. Small beer producers are also benefiting from the small breweries relief.”

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