High strength beers to get tax whammy
The Government has said it will increase the tax on high-strength beer and cut duty on lower abv beer from late 2011.
It will set out the new rates for beers of more than 7.5% abv and less than 2.8% abv in budget on March 23, 2011.
Treasury minister Justine Greening said in a written statement to parliament: “The government recognises that in some areas taxation can have a role in helping to address the harms associated with problem drinking."
Brigid Simmonds, chief executive of the British Beer & Pub Association, said: “We are pleased that the Government has decided to reduce duty for beer below 2.8% abv. This will provide a welcome incentive for further investment in these beers, and encourage people to choose lower-strength drinks.
“However, when it comes to the increase in duty on higher-strength beers, these account for less than 0.5% of total alcohol sales, and less than 1% of beer sales. Duty rates remain untouched for higher strength drinks such as spirits and wine.
“Overall, we need a duty system that nudges consumers to choose lower-strength, pub-based drinks such as beer."