Beer firms barrack budget blow

While the nation’s cidermakers have been granted a initial reprieve, British brewers are still reeling and raging from Alistair Darling’s decision to raise duty on beer by five per cent as part of his 2010 Budget.

Brigid Simmonds, British Beer & Pub Association chief executive, said the latest beer tax hike and extension of the much-maligned beer duty escalator, has piled on the misery for Britain’s hard-pressed pubs and beer lovers.

“Since 2008, beer tax has increased by an eye-watering 26% – a £761 million tax rise – and we have seen the loss of 4,000 pubs and over 40,000 jobs up and down the country,” she said. “Beer sales are down £650m in the last year alone.

"The Chancellor’s claims that this is a Budget for investment and growth are hollow, considering he’s just hit the beer and pub sector with a £161m tax rise. The extension of the tax escalator for an extra two years also means more pain.

"Recently, there had been some signs of improvement in our industry but this recovery will be threatened by Mr Darling’s tax rise, which is putting hundreds more pubs and thousands more jobs at risk."

A spokesperson for Molson Coors reacted in more measured terms. “One of life’s simple pleasures is sharing a beer responsibly and sociably with friends at home or in the local pub and, at Molson Coors (UK), we believe this is fundamental to maintaining a healthy respect for alcohol,” said an anonymous suit.

“We do not want to see this disappearing for the relatively small gains this tax will make for the Treasury and are disappointed the government has chosen to, once again, increase duty on beer.”

Keith Bott, chairman of the Society of Independent Brewers (SIBA), argued that cask ale was being punished for crimes that other forms of alcohol have committed. “The continuous percentage hikes in duties across the board fail to address the imperative to move consumers away from stronger alcohols with greater potential to cause harm, towards cask ale.

Cask beer, with its relatively low abv, is always consumed in the controlled, socially responsible environment of the pub, making it a much less damaging form of alcohol than cheap supermarket-bought spirits. “

Meanwhile, Tom Wells, vice chairman of Bedford-based brewer and pub operator Charles Wells, dispatched an angry letter to the Chancellor, lambasting him for the government’s treatment of the brewing industry, which he compared to a Communist regime.

“We look to our government to make good and effectual laws on behalf of our sovereign and her loyal subjects,” wrote Wells.

“However Her Majesty’s government continues to meddle in commerce that it seems to have a limited understanding of often leading to unintended and unfortunate consequences.”

The BBPA has also written to the government following the u-turn on the 10% hike in cider tax. In an open-letter, Brigid Simmons argues that the beer’s case for a rethink on duty is equally as compelling as cider.

The letter says: “Despite the headline tax increase for cider of 10%, in reality this amounted to a 2.4 pence tax increase per pint – exactly the same as tax increase on a pint of beer.”

Ben McFarland, 16.04.2010