Drinks industry hails chancellor

19 March, 2014

The alcohol industry praised Chancellor George Osborne after he froze duty on spirits and cider, lopped a penny off beer duty and scrapped the duty escalator on wine.

Camra chief executive Mike Benner said: “Camra is delighted to see the chancellor implementing an unprecedented second consecutive cut of a penny in beer duty. This is not only about keeping the price of a pint affordable in British pubs but helping an industry which has been in overall decline continue on its long road to recovery. Camra cares greatly about the future of the Great British pub and it is clear from this Budget announcement that the government do too.

“Keeping the price of a pint affordable is vital for the long-term health of the pub sector and CAMRA would hope this latest vote of confidence in British pubs will go some way to slowing the rate of closures, by encouraging more people to make use of their local this summer.

“No doubt many of CAMRA’s 160,000 members will be raising a glass to the Chancellor this evening to toast another brilliant Budget for British beer drinkers.”

Paul Bartlett, chair of the National Association of Cider Makers, said: “It is great news that the chancellor has abandoned the duty escalator and frozen duty on cider this year in recognition of the important role that cider makers play in their local, rural communities, as well as the impact on growers and cider makers from the winter storms and rain.

“Responsible drinkers will be able to enjoy British cider as the cycle of continual above inflation increases is now broken.

“This common sense decision will be celebrated by nearly 500 producers across the country as it protects the investment they have made over many years to grow the industry and support the rural community, as well as supporting thousands of jobs.

“As the investment cycle for our industry is measured in decades, we have a critical need for stability on duty and policy and we hope this decision signals a period of sustained support from government for a great British success story.”

Brigid Simmonds, BBPA chief executive, said: “This is fantastic news, and George Osborne is again the toast of Britain’s brewers, pubs and pubgoers. It will protect over 7,000 jobs over two years, mostly jobs of younger people in Britain’s pubs.

“It also shows that the Government has understood our case, that taxes on British beer had become far too high, and action was long overdue.

“I hope this becomes a trend in future budgets for this British-made, lower-strength drink.”

Julian Grocock, chief executive of the Society of Independent Brewers, said: “It is good to see that this government believes in providing long-term support for the British brewing and pubs industry.

“SIBA’s Budget submission to the Treasury this year was based on the very positive impact of the 2013 duty cut on the local brewing industry. Our members now feel more confident about the long-term prospects for their breweries, and are investing in them by buying new equipment, recruiting new staff or opening new pubs.

“This evidence of an industry buoyed by the duty cut, which we presented to government both centrally and locally, through our members’ lobbying of their MPs, is one reason why we have been given what we asked for in this Budget – the ‘same again, please, George.’. We promise to return the Chancellor’s positive response by giving back more of the same from Britain’s local brewers: more investment in breweries, jobs and pubs.”

James Lowman, chief executive at the Association of Convenience Stores, said: “We welcome the scrapping of the alcohol duty escalator and the decision to reduce beer duty by 1p, which will benefit consumers and reduce some of the pressure on local shops losing trade to the illegal market.

“However, there remains a significant illegal market in alcohol products, and we will continue to press for more focus on catching illegal sellers and tougher penalties once they are caught.”

Heineken UK managing director David Forde said: “By freezing cider duty and again reducing beer duty – he sends a clear message that brewing, cider making and the great British pub are important to the UK’s economy.”

Spirits suppliers also welcomed the news as the chancellor said he wanted to boost the “British success story” that is Scotch whisky.

Andrew Cowan, country director for Diageo Great Britain, said: “The Chancellor has today given a huge boost to one of Britain’s most successful industries. From Scotch whisky to London Gin, British spirits are admired and enjoyed around the world. In freeing the industry from a debilitating tax policy the Government has given a show of support for these quality products. That will benefit the industry not just at home but also help us as we fly the flag for British business across the world.”

Wine did not fare as well as rival alcoholic drinks as duty will rise at the rate of inflation, but Wine and Spirit Trade Association chief executive Miles Beale said members would be toasting the Chancellor.

“It is great news that our Call Time on Duty campaign has been successful. This will be widely welcomed by consumers and businesses across the UK,” he said. “The chancellor’s decision to scrap the alcohol duty escalator a year early and freeze alcohol duty for spirits is fantastic news and will be widely welcomed by consumers and businesses.

“The move will help British pubs, bars, and restaurants up and down the country, and will boost jobs and investment in the great British drinks industry and in the hospitality sector more widely. While we would have liked to have seen a complete freeze on wine duty, the WSTA and our Call Time on Duty campaign partners applaud the chancellor’s decision to scrap the escalator and will be raising a toast to George Osborne.”

But not everyone is happy. The chancellor said that the escalator on tobacco would remain through the next parliament as there were no compelling health reasons to remove it.

Paul Stockall, of the Tobacco Manufacturers’ Association, said: “Today’s announcement to increase tobacco duties by 2% above inflation and continue this duty escalator policy through the next parliament will do nothing to arrest the increase in illegal tobacco that is currently costing the UK Government up to £7.9m per day in lost tax revenues.

“This loss in revenue is further compounded by the Office for Budget Responsibility’s repeated downgrading of legitimate tobacco receipts, which has seen projected revenues for 2013/14 fall by up to £200mn, as consumers faced with higher tax led prices and weak disposable income increasingly switch to the illegal market. The Government has missed an important opportunity to address this counterproductive tax policy.”

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