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Brewer calls for balancing act on duty

SABMiller has called on the UK government to rebalance alcohol duty to encourage consumers towards lower-strength alcohol products.

In the last 13 years, beer duty has increased in real terms by approximately 20%, whereas the duty on spirits has fallen by 15%.

This change has not only been a perceived driver in shifting consumers to higher-strength drinks, but it has also compounded the challenges facing the beer sector, contributing, according to the brewer, to an increase in the rate of pub closures.

“Nonetheless, the beer industry is a far more important source of jobs in the UK than spirits, wine and cider production combined,” said a statement from the world’s second-largest brewer.
Kristin Wolfe, head of alcohol policy at SABMiller, the world’s second largest brewer, said: "We propose that the alcohol duty regime is rebalanced to differentiate between the consumption of higher and lower strength alcohol products.

“The aim should be to nudge consumers towards lower strength products, such as beer. This will help protect jobs, support important domestic businesses and reflect the higher risks associated with higher-strength categories of products.
“This policy is pursued in many other European countries. In France, for example, each degree of alcohol in spirits is taxed over seven times higher than for beer, the average for EU countries is that spirits are taxed at 3.2 times the rate for beer but the ratio is only 1.4 in the UK."
Research carried out by the Centre for Economics and Business Research, commissioned by SABMiller, into alternative excise policies revealed that more than 3,600 jobs in pubs could be saved, yielding an additional £1 billion in tax revenue.

Alan Lodge, 09.02.2011

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