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Trade reacts to trio of UK duty cuts

The UK trade has welcomed a trio of cuts to the duty on beer, spirits and cider calling it a “momentous result” and dubbing the Chancellor George Osborne a “hat trick hero”.

Today Osborne announced a third consecutive cut to beer duty and a 2% cut to cider and spirits duty in today’s 2015 Budget. Duty on wine meanwhile will be frozen.

The cuts follow a hard fought campaign, Drop the Duty, led by the Wine and Spirits Trade Association (WSTA), TaxPayers’ Alliance and the Scotch Whisky Association. The campaign had called for a 2% cut to both wine and spirits making the victory for spirits somewhat bittersweet. While claiming a valuable triumph, the WSTA said it was “disappointed” that wine had not also been afforded a cut. The beer industry meanwhile has plenty of cause to celebrate after a historic third cut to beer duty of 1p which campaigners have said will boost employment by 3,800 this year alone and attract further investment in the industry.

  • General beer duty cut by 2%
  • Duty on spirits cut by 2%
  • Duty on lower strength cider cut by 2%
  • Duty on still and sparkling wine frozen
  • Duty on low strength beer cut by 6%, duty on high strength beer cut by 0.75%
  • Duty on high strength cider cut by 1.3%

Click through for the trade’s reaction to today’s cuts…

Miles Beale, Chief Executive of the Wine and Spirit Trade Association

Miles Beale, chief executive of the WSTA

“This small drop in duty will result in a big cheer for the UK’s 24m spirit consumers. We are grateful to those MPs who listened to their constituents and supported our campaign and hope that all parties are able to support the measures outlined today and build on them in the next Parliament.

“We campaigned for a cut in duty across all products and are disappointed that the UK’s 30m wine consumers did not receive a duty cut too. But freezing wine duty is an improvement and a first step towards supporting wine businesses that are looking to invest in the UK, create jobs and back British pubs.”

Brigid Simmonds, chief executive of the British Beer & Pub Association

Brigid Simmons

“The Chancellor really is a “Hat Trick Hero”. His third, successive beer tax cut shows he has listened to consumers, publicans and brewers. Beer tax is now ten pence lower than it would have been under the beer duty escalator, which he abolished. It will boost employment by 3,800 this year alone and attract new capital investment. It will put 180 million pounds in the pockets of beer drinkers and pubgoers. That is a huge difference.

“Cutting beer duty supports a great British Industry which contributes £22 billion to GDP and supports almost 900,000 jobs. It’s also a boost for pubs, as beer accounts for seven out every ten alcohol drinks sold in our pubs.

“The renewed confidence in our sector is reflected in rising beer sales in 2014, for the first time in a decade. There is of course more work to de done, and we look forward to persuading MPs in the next Parliament that further action is needed to encourage consumers towards our lower-strength, British-made national drink.”

Martin Thatcher, chair of the National Association of Cider Makers

Martin Thatcher

“We are delighted that the Chancellor has decided to support the British cider industry by cutting duty in his Budget Statement. This is a very welcome decision and proves the Government understands the huge importance of our industry to rural communities.

“This important decision will be celebrated by cider makers up and down the country as it protects the investment they have made over many years to grow the industry and support thousands of jobs.

We and all cider drinkers will be raising a glass of delicious cider to the Chancellor this evening.”

Mike Benner, managing director at the Society of Independent Brewers

“This is a great day for British independent brewers, pubs and consumers. We applaud the Chancellor’s decision to support British beer with this historic third cut in beer duty. It continues the momentum of the cuts in 2013 and 2014 and will boost growth, employment and investment in the independent brewing sector.”

He added: “According to preliminary findings from SIBA’s British Beer 2015 report, published tomorrow (19 March), production by SIBA brewers has risen by around 25% since the abolition of the Beer Duty Escalator in March 2013 and an estimated 1,600 jobs were created during 2013 and 2014, many of them in rural and deprived areas.

“The two duty cuts and end of the escalator have reduced the average price of a pint of beer by 16p and saved over 1,000 pubs from closure. At the same time, Government revenues from beer duty were up by1.5% in the year ending June 2014.”

David Frost, Scotch Whisky Association chief executive

SWA chief executive David Frost (Photo: SWA)

“This is a historic decision and only the fourth time whisky duty has been cut in a century. The Chancellor’s announcement will be toasted across the whisky industry and by consumers who are getting a fairer deal on tax when they have a drink of Scotch. The move is a major boost to our industry as we look to grow again in the UK, and equally sends out an important signal on fair taxation to our export markets.

“The industry is raising a glass to George Osborne and his Treasury team, as well as to all those who have supported our campaign over the last two decades.”

Tim Page, chief executive of The Campaign for Real Ale

CAMRA chief executive Tim Page (Photo: CAMRA)

“The last two cuts have already had a huge impact, saving over 1,000 pubs from closure and keeping the price of a pub pint down. Independent research by CEBR forecasts that the price of a pub pint will now be more than 20p cheaper than it would have been had the beer duty escalator remained in place.

“A third cut in beer tax is a huge vote of confidence in the importance of pubs and brewing. It will help ensure the sector returns to long term growth after many years of pub closures and falling beer sales, caused in part by a 42% beer tax increase between 2008 and 2012, and throw a lifeline to struggling community pubs across the country.

“Britain is known around the world for great pubs and real ale, and we should all be incredibly proud that this industry has just reported growth for the first time in a decade. We hope Britain’s millions of pub goers will head to their local this evening to give three cheers to a historic third cut in beer tax!”

 David Forde, managing director of Heineken

David Forde

“We are delighted that the Chancellor has delivered a historic hat-trick of duty cuts for beer and a cut to cider duty. This momentous result recognises that brewing, cider making and the great British pub are crucial to the UK’s economy and will ensure that a hard earned pint remains affordable. Cheers Chancellor!”

Denis O’Flynn, managing director, Pernod Ricard UK

“This small drop in duty is an important contribution in supporting jobs, growth and investment in the UK spirits industry.

“While it is disappointing that the UK’s 30 million wine consumers did not receive a duty cut as well, we are pleased that the Chancellor has chosen to freeze wine duty at its current rate.  This is certainly an improvement and a good first step.

“Pernod Ricard UK wishes to acknowledge and thank all the MPs and consumers who have supported the campaign to cut the duty.”

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