United Kingdom: Gordon Brown’s decision to raise beer duty in the Budget on March 16 has been criticised by Britain’s brewers. “It is very disappointing that Gordon Brown continues to choose a tax strategy that favours imported Australian chardonnay over home produced British beer”, said Mark Hastings, Director of Communications of the British Beer & Pub Association.

“In recent years, there has been a surge in wine drinking and the strength of wine we drink. Yet while stronger beer is taxed more than weaker beer, stronger wine is taxed the same as weaker wine. The result of taxing wine at flat rates is the most popular wines in Britain enjoy a tax advantage over beer, which is taxed on a sliding scale according to alcoholic strength. This now costs the Treasury up to £170 million in lost revenue every year.”

Ninety per cent of beer sold in the UK is produced in the UK, while 99 per cent of wine sold in the UK is imported. Since 1979 wine sales have leapt by 162 per cent. Beer sales have sunk by 16 per cent over the same period.

“We were looking for a tax freeze”, said Hastings. “The Government’s own figures show a beer duty freeze is good for beer and good for Treasury revenues. Beer sales are more certain and the Treasury takes more in tax, which means more money to spend on public services. “We call on the Chancellor to stand up for beer and support the competitive position of the nation’s brewing and pub sector. ”

The British Beer and Pub Association is the UK’s leading organisation representing the brewing and pub sector. Its members account for 98% of the beer brewed in the UK and own two thirds of Britain’s 60,000 pubs.

During 2004, BBPA commissioned Oxford Economic Forecasting (OEF) to undertake an econometric study into how duty rate changes actually impact on the beer market and government revenue. The main findings were that beer duty increases do not yield projected revenues and that the current duty rate is close to the revenue-maximising level.

Beer sales have declined by 16 per cent since 1979. Beer duty has increased five times since 1997 by 16 per cent.

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