CAMRA calls on the Treasury to scrap the beer tax escalator in the next budget
The current government's Coalition Agreement contains a commitment to "review alcohol taxation and pricing" with an aim to "tackle binge drinking without unfairly penalising responsible drinkers, pubs and important local industries." Only an end to the beer duty escalator delivered in the March 2013 budget will allow for this commitment to be fully enacted.
CAMRA believes that the beer duty escalator plays a huge part in the rate of closing pubs in the UK. British beer drinkers are paying the second highest beer duty in the European Union- currently over 12 times higher than the duty paid in Germany, and over 8 times the amount paid in France.
It's time for the government to scrap the beer tax escalator. The beer duty escalator unfairly penalises responsible beer drinkers, pubs, and local brewing industries- and it doesn't even make the country any money.
CAMRA's evidence shows that higher taxes do not encourage people to drink less. Instead, consumers are changing their drinking behaviours. The beer duty escalator has had the reverse effect of its original intentions to tackle cheap alcohol sales in supermarkets. With beer on the off trade now selling for as cheap as 50p a pint, the beer duty escalator encourages consumers to buy cheaper alcohol from off licences and supermarkets. The increasing cost of beer also encourages consumers to opt for wines and spirits which typically have much stronger alcohol content by volume.
50% of beer sales are made through pubs, compared with just 20% of UK wine and spirit sales. This significant gap is key to an understanding of why an escalating tax heavily affects beer sales whilst wine and spirit sales are less affected. Beer supports more jobs and generates more VAT per unit of alcohol sold. Ending the beer duty escalator would result in a financial gain to the treasury.
Every time a pub closes, 10 full time and part time jobs are lost, whilst each job in brewing supports 21 jobs across the industry. Each year the beer duty escalator continues, these jobs continue to be under threat. Beer is integral to British business and exports, with 87% of beer sold in Britain brewed on home grown soil.
CAMRA believes that if the government doesn't act now, the beer tax will have a devastating impact on the brewing and pub sector. Scrapping the beer tax will result in fewer pub closures, higher employment, faster growth of UK beer exports, and gain to the country's finances.