Cash-strapped brewers urge UK tax rethink

By Neil Merrett

- Last updated on GMT

Related tags Tax

Pressure is growing on the UK government to resist imposing further hikes on beer up to 2012, amidst fears over declining consumption rates and a struggling pub industry in the country.

In the current economic downturn, the British Beer and Pub Association (BBPA) said that combined beer sales at both retail and pub level fell 8.3 per cent during the final fiscal quarter of 2008.

Euro concerns

The announcement comes after reports that official German figures suggested had recorded a second consecutive annual fall in demand within the country for beer in 2008, similarly endangering brewers in the country.

Like with all alcoholic drinks, beer pricing has become an increasingly difficult issue in recent years for manufacturers and retailers, amidst concerns from both health groups and the industry over balancing responsible consumption and profits.

Earlier this month, the head of trade group the Brewers of Europe told that brewers needed to be able to price their products competitively in order to protect their interests.

Rodolphe de Looz-Corswarem, the association’s secretary general said that the industry at the same time had to ensure it was promoting moderate and responsible consumption of alcohol.

However, the BBPA has called on the government to take the industries’ struggles into account when considering further hikes to taxes on beer in the next few years.

Tax increases

The association claims that with the pub sector expected to pay an additional £300m (€326m) to cover the cost of a mandatory code of practice, tax policies may need to be reconsidered if the industry is to have a long-term future.

“We are not asking for a tax handout, like other sectors,”​ stated the BBPA. “We just don’t want our tax burden to be made worse.”

The association claimed that taxes on beers within the country increased by 18 per cent last year alone due to government policies on Value Added Tax (VAT) and that further hikes were expected.

“We are facing two further tax increases this year alone,”​ stated the BBPA. “By the 2012 Budget, the tax on [a] pint of beer will have increased by up to 40 per cent from February 2008.”

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