UK: Drinks trade urges Chancellor to drop tax

17 March, 2009

UK: Five drinks trade bodies have jointly urged the Chancellor abandon alcohol tax hikes, due to start next month.

UK: Five drinks trade bodies have jointly urged the Chancellor abandon alcohol tax hikes, due to start next month.

Chairmen from British Beer and Pub Association, the Gin and Vodka Association, the National Association of Cider Makers, the Scotch Whisky Association and the Wine and Spirit Trade Association met with Chancellor Alistair Darling and the business secretary Lord Mandelson to discuss the impact of tax rises and the economic slowdown on the sector.

The meetings come just weeks after the drinks industry warned in its first ever joint Budget submission, that over 75,000 jobs are at risk if the Government proceeds with its current plan to further increase taxes on alcohol over the next four years. 

In the meetings, the drinks industry urged the Chancellor and Lord Mandelson to abandon the 2% above inflation tax escalator on alcohol due to start in April and called for no further increases in excise duty in this year’s Budget.

In asking for a duty freeze, industry leaders argued that it is essential now to help businesses across the whole sector cope with the most testing economic conditions. They argued that this will save jobs and help to sustain Treasury revenue that would be otherwise at risk as a result of falling alcohol sales.

Research by Oxford Economics included in the industry’s Budget submission examined the effects of last year’s 17% leap in excise duty and the implications of the four year tax escalator scheduled to start this year. Forecasts include a further 75,000 jobs at risk in the drinks industry; a drop in alcohol sales by over 11%; consumer prices up 17%; tax revenue from alcohol £1.6 billion lower than original Treasury estimates.

A spokesman for the five trade associations said:  “We appreciate the opportunity to make our case directly to the Chancellor and Lord Mandelson and hope that they will take a close look at the potential impact on employment of any further tax increases.

”The Government has a real opportunity next month to reverse its planned tax increases on the drinks industry to protect jobs and Treasury revenue.”


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