The UK drinks trade has expressed ‘dismay and disbelief’ over the Chancellor’s decision to raise tax on alcohol.
Alistair Darling will cut VAT by 2.5% to 15% from Monday 1 December, for 13 months in his Pre-Budget Report. But to off-set this increase, he is imposing an 8% rise in duty on alcohol. Unlike the VAT cut, the duty rise is permanent.
WSTA chief executive Jeremy Beadles said drinkers will pay the price for bailing out the economy. He said: "The Chancellor has given consumers no cause to celebrate this Christmas.
"This year he will have increased tax on alcohol by a massive 17%, hurting consumers when they have little else to cheer about. It's the wrong tax rise at the wrong time."
British Beer and Pub Association director of communications Mark Hastings said beer sales are at their lowest since the Great Depression and brewers and licensees need all the help they can get.
He said: “It’s truly staggering that struggling community pubs and brewers have been denied the tax benefit extended to the rest of the business sector through the VAT cut.
“With pubs closing at record rates and beer sales at their lowest since the Great Depression, this sector needs a fiscal stimulus just as much as the rest of the economy.
“There is genuine dismay and disbelief that the Chancellor is turning a deaf ear and a blind eye to the economic plight of Britain’s traditional beer and pub sector.”
Michael Turner, chairman of brewer and pub company Fuller, Smith & Turner added:
"We already have the highest beer duty in Europe, and there is no justification for piling on another 8%. The Chancellor's increase in his spring budget of 9.1% coming on top of the smoking ban had already damaged beer volumes so badly that he is getting less income from beer duty than he did last year. The Treasury must stop raising taxes otherwise, as they must realise, they will kill the golden goose, and the traditional British pub with it.
"Before this latest increase the Chancellor was already making fifty times more out of each pint than the four largest brewers in the country."