Much has been said on this subject and with the passing of the budget it might no longer seem topical, but it matters, really matters, which is why I am moved to down hops and put fingers to keyboard.
It is no exaggeration to say that the exponential increase in beer duty is killing off local pubs. The beer duty escalator was put in place by the previous Government in 2008 and means that beer duty is increased at 2% above the rate of inflation every year. This is making the price of beer so expensive that fewer people go to pubs to spend their hard earned cash and when they do go, they tend to spend less. There are some quite shocking facts and figures that back this up:
Since 2004 beer duty has risen by 52%
The amount of duty actually paid to the treasury had risen by only 7%
Whilst the amount of beer sold in pubs has fallen, yes fallen, by 25%
These figures have been produced by Oxford Economics on behalf of the British Beer & Pub Association. If you want to find out more detail you can do so here http://www.beerandpub.com/
In the meantime The Financial Times recently reported that pubs have been closing at the rate of 16 a week in last half of 2011 (http://www.ft.com). Other reports cite 52 a week. Whatever the number is it isn’t good.
What this means is that, to use economic terms, as the beer duty rate is pushed up the marginal rate of tax return for the Government is falling dramatically. The total amount of money paid to the Treasury in duty is going up, but not by much and if the duty rate continues to rise much more there is a serious risk that the amount of actual duty paid will fall rather than rise. To add to the relatively poor rate of tax return to the Government, there are many jobs associated with the production and sale of beer that have been damaged as beer sales fall and, most importantly, many, many communities have lost their pubs.
The reason that pubs are so badly hit is that they are, by definition, a more expensive environment in which to drink than having a few beers (or indeed any other kind of drink) at home. This is because pubs, particularly independent pubs, cannot buy in the bulk that supermarkets can and they also have the costs of the premises, staff, entertainment, licences etc. which make pubs the safe, enjoyable places which we know and love. All of this means that any duty increase will have a disproportionate effect on pubs as people seek cheaper drinking alternatives. A recent report from YouGov SixthSense (http://sixthsense.yougov.com/lifestyle-reports/pubs-and-bars.aspx) stated that up to a third of pub goers are now visiting the pub less and about half of these said that it was because drinking at home was cheaper.
In short, the duty rises provide an ever lessening benefit for the treasury, whilst driving people away from pubs, which makes pubs less viable and leads ever more to close. Pubs are at the heart of many communities, they provide company, entertainment, good beer and jobs. They have been part of our social landscape for centuries and yet we are discarding them at a frightening rate. We have to stop this.
To be clear we are not calling for a cut in duty. We believe beer should be taxed as a means of raising money, especially in these difficult times. Further, duty can be a useful means of controlling prices and alcohol available too cheaply is not a good thing. But we would beg, plead, respectfully request and just plain ‘ask’ that beer duty is looked at in the round, not as a bottomless pit of ‘sin taxes’. We are in serious danger of damaging a great British production success story (brewing) and the wonderful institution that is the British pub.
If you haven’t already done so please sign this petition http://epetitions.direct.gov.uk/petitions/29664 on the Government website. If enough of us sign then Parliament will have to consider the beer duty escalator issue.
Better still write to your MP and ask them the questions what benefit does the beer duty escalator bring and what damage does it do? Make those that take the decisions consider the implications. It is too easy for MPs to see beer as a ‘sin tax’ that can go on raising ever more money with no downside; this is not true and it has to stop.