Industry blasts budget raid on alcohol – updated

Drinkers are reeling from a huge increase on alcohol duty in the budget. I will be posting reaction as I get it.

In a nutshell, beer, wine, cider and spirits are all going up in price, with duties rising 2% above inflation each year for the next four years after an immediate 6% above inflation rise. 

This means that beer goes up 4p a pint, 3p for cider, 14p for wine and spirits up 55p for a bottle from midnight on Sunday with more big rises for years to come.

As Huw Edwards of the BBC said, it’s going to be a weekend for drinking. To many in the pub industry, we are now drinking at the last chance saloon. 

This was not as bad as my prediction  although it looks more accurate if you bear in mind the trick of spreading bigger rises over four years. When the  rises will be passed on to the consumer, as Camra claim, the chancellor’s budget will eventually put 20p on a pint.

Paul Wells, chief executive of Charles Wells, said that the 4p increase in duty, plus VAT, will mean an instant 10p rise in beer. Wine and spirits will follow the same model.

Rob Hayward, Chief Executive of the British Beer & Pub Association, which believes the price of a pint will reach £6.50 by 2012, said: “The millions of people who enjoy beer have just been hit by a £50.5 million a month tax raid on their family budgets.

“By aiming a tax hike at beer, the Chancellor is shooting himself in the foot. Treasury revenues will continue to fall, pubs will continue to close and beer sales sink further.”

“Every single day, the Treasury is losing over £1 million in beer taxes and four pubs are closing. People are now drinking 1 million fewer pints a day compared with last year. It’s a decision doomed to failure.”

“Government tax policy is fuelling Britain’s binge drink problem by driving people away from beer, out of the pub into the arms of the deep discounting supermarkets.

“They don’t pay beer duty and don’t allow brewers to pass it on, so their rock bottom prices will remain unaffected by this tax hike.”

The Wine and Spirit Trades Association Chief Executive Jeremy Beadles said: “British consumers will now pay more tax on wine than anyone else in the European Union.

“It is bizarre at a time when the many families are feeling the pinch that the Government should choose to add to their burden by making the simple pleasure of a glass of wine or spirits considerably more expensive.

“Wine and spirit drinkers already face the prospect of price rises as a result of the increasing cost of raw materials – grapes, grain, packaging, glass, freight and energy. This tax hike will simply make things worse.”

Mike Benner of Camra added: “The budget shows a disregard for our national drink and for the 15 million people who enjoy it responsibly.”

Nick Bish, chief executive of Association of Licensed Multiple Retailers, gave the most eloquent analysis of all, saying: “The Budget proves that the Chancellor doesn’t give a XXXX for Britain’s pubs.”

The Society of Independent Brewers (SIBA) called the Budget is “another nail in the coffin of the traditional British pub”.

 For details of the budget (as it affected drinkers) as it happened, click here.