Beer industry calls for 'rebalanced' duty system

Scrapping the proposed duty increase on beer would save more than 10,000 jobs in the coming year, it has been claimed.

The British Beer & Pub Association has condemned the “destructive” beer tax policy introduced by Labour and urged the coalition to “rebalance” the duty system to favour on-trade consumption of beer, and to penalise higher-strength products like spirits.

“If the Government scraps plans, put in place by the previous administration, to further increase beer duty above inflation this could save over 10,000 jobs in 2011/12 alone,” the BBPA said in its Budget submission.

“The latest Oxford Economics research for the BBPA also shows a freeze in beer duty could generate up to £40 million in additional tax revenue, boosting beer sales and employment in pubs whilst stemming the 29 pub closures per week.

“We firmly believe the tax system should encourage the consumption of lower-strength drinks, such as beer, in the supervised environment of pubs as part of the solution to concerns around alcohol-related harm.

“Unfortunately this is the opposite to the policy of the previous administration, which froze spirits duty for a decade whilst continuing to increase beer duty. This ensured that vodka and other spirits became relatively cheaper compared to beer thus boosting their sales, particularly among young adults.”

Chancellor George Osborne will deliver his Budget on March 23 and is expected to increase duty on alcohol by two percentage points above the level of inflation.