ALE Spring 1998 No. 290

Taxing Times - a Gift for French Brewers

One third of the price of a pint of beer in a British pub is tax (Excise duty and VAT). We pay nearly seven times more tax on a pint than the French! One pint in twenty drunk over here is brewed in France! This is set to increase to a staggering one pint in five by 2006!

Because of the Government's high tax policy, pubs and breweries are closing. Kent brewers Shepherd Neame claim that they have been forced to c!ose 45 pubs since the Single Market came into force in 1992. Since Christmas, at least six small local breweries have closed. This affects local services, choice for consumers and of course jobs - 900,000 British jobs are supported by the industry.

There is an argument for cutting tax on all alcoholic products, but beer sales count for over 60% of the turnover of an average pub, so the effects of a cut in beer tax would be most beneficial. It's an unfair tax too; a 20 or 30p increase on the price of a bottle of wine would scarcely be noticed.

Chancellor Brown backs Beer Smugglers

So what did the Chancellor do in the Budget? He aided and abetted the growing army of smugglers by adding a penny on beer tax. Some two-thirds of the beer coming over from Calais is smuggled. Smugglers don't care who they sell to, so long as they collect the cash. This is leading to increased problems with under-age drinking. A high tax acts against the licensing law. If tax was reduced more people would do their drinking in the socially controlled environment of the local pub.

There are no winners from high beer tax. Sensible use of the Treasury's own economic model has shown that a tax cut of just 20% would be self-financing after two years. The industry would benefit and all pub-goers (not just beer drinkers) would benefit from increased investment in pubs. The Government would not lose overall revenue due to the positive effects (on demand) of lower prices and better amenities. Unfortunately, the Treasury seems to be ignoring this.

CAMRA sent its Budget submission to Gordon Brown. We want him to cut beer tax down to the European average, in stages, to be achieved by the year 2000.

We also want him to reduce the amount of beer individuals can bring back in the form of personal imports without running across additional customs duty. At the moment, this is far too high. It must be reduced significantly until tax harmonisation has been achieved.

The call for a reduced beer tax is not new; the consequences of neglecting it are mushrooming - our social infra-structure is under threat as never before.


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