The great beer depression

Despite the government’s view that everyone in Britain is drinking themselves silly, the tax take from beer is falling.

Figures released by the British Beer & Pub Association show that the policy of consistently increasing taxes on beer is self-defeating as it is eroding Treasury revenues. It argues that further tax increases will only make the situation worse and proposes a tax freeze.

Over the last two tax years – 2005/6 and 2006/7 – the revenue collected from beer has fallen despite an 8.9% increase in tax. The total fall now amounts to £29 million. In the current tax year, returns on beer duty are on track to be down a further £17 million – a loss heading for £46 million over three years.

A duty freeze on beer is the only way to protect both government finances and a brewing industry which is under severe pressure this year.

On the radio yesterday, A spokesman for Fullers said each pint they produce will have to rise by 20p because of shortages in raw materials, for example hops.

Greedy Gordon wants to exploit the scare stories about binge Britain by putting up the price of your pint even more on March 12. The fact that it will encourage less drinking is a bonus to this controlling son of the manse.

But surely even he realises that he will be shooting himself in the foot.

Beer sales in pubs – including lager – are now at their lowest level since the Great Depression of the 1930s. Today’s pubs are selling 14 million fewer pints a day than they did when sales were at their peak almost 20 years ago in 1979. Overall sales in pubs, supermarkets and off-licences are down seven million pints a day over the same period.