UK budget bringing further drinks strife - trade group

Speaking after the announcement by British chancellor Alistair Darling of this year’s UK budget, a number of trade groups have criticised an additional two per cent rise on drink tax above inflation, a move they claim will cripple the industry.

Pricing of alcoholic drinks has become an increasingly difficult issue in recent years for manufacturers and retailers across Europe, leading the industry to have to balance promoting responsible consumption and profits.

Although Darling himself has not directly used health concerns about alcohol abuse as a motive for the increased taxes, some health groups have welcomed the duty focus in recent years as a step in the right direction.

Following the budget announcement, the Wine and Spirits Trade Association (WSTA) said it continued to seek an end to a four year escalation of taxes on alcohol, suggesting duty on the products will be up by about 40 per cent by the London Olympic games in 2012.

WSTA chief executive Jeremy Beadles claimed that the increased taxes showed that the UK Government was failing to protect drink makers compared to other industries.

“Thousands of jobs have already been lost in the industry and the decision to go ahead with a further tax increase puts thousands more at risk,”​ he stated. “It’s a bitter irony that with falling sales, these tax hikes are unlikely to deliver the ​revenues forecast by the treasury.”​​

In his annual budget last year, the chancellor imposed a six per cent increase in alcohol duties, with the move cautiously welcomed by some health groups as a deterrent to heavier drinking.

However, alcohol policy group Eurocare told BeverageDaily.com last March that a tax structure that charged drink on the level of alcohol present would offer a more 'rational' means to encourage responsible drinking than a flat rate.