Wednesday, 9 May 2012

Stop the Beer Duty Escalator

I've said before, I'm not sure that beer duty isn't actually a good thing for pubs. Equally, more expensive craft beer suffers less than lower priced beer. The more you pay per pint, litre, or whatever, the less of a proportion of the price goes in duty and more goes into the quality of the beer, or the quality of the pub you drink it in.

It is also true that the duty escalator is applied to all types of alcohol. Wine, whisky and even the ridiculously low cider duty is still escalated by 2% above inflation. S,o I'm not sure why everyone is calling it the Beer Duty Escalator.

Never-the-less, beer duty has very nearly doubled in the last 10 years, most of the increases have happened since I started in the beer industry. Microbrewers, despite getting a discount, now pay nearly the same amount of duty that large brewers paid when I started to brew. Larger brewers must really now be feeling the pain.

Which ever way you look at it, it is not good.

There was an e-Petition set up on the Governments official petition site. Originally by the Goblin haunted Wychwood Brewery was behind the petition, but CAMRA then took up the cudgels big time.

There are a few issues I have with the exact wording of the petition. For instance, dropping the duty rate isn't going to help the pub over supermarkets. The continual use of the word tradition as an excuse for reducing beer duty.

It is a fact that duty is a tax that has seen the costs of producing alcohol increase significantly for producers big and small.

CAMRA have firmly taken hold of the torch and are running like a good'un. Yes, I'm not so sure I condone the rhetoric, but it's one that will work with many who do like a good pint, so why not?

CAMRA have even launched a web site where you can order posters and beer mats. Go on, do it, it doesn't cost anything, and then get the posters up in your local and spread the beer mats about.

I want this petition to reach 100,000 signatures and make the Government reassess its duty escalator. If we don't when will they stop the escalator?

Please sign the petition and please get anyone else you know to do so too.


Curmudgeon said...

It may seem slightly counter-intuitive, but as prices in the market overall go up, those selling the higher-priced products are likely to be disadvantaged even if, relatively speaking, their prices go up less.

Also don't forget the additional 20% slug of VAT, and the fact that much of the pub trade works on a fixed percentage gross margin.

Presumably it's called the Beer Duty Escalator by CAMRA and others because they are only asking for it to be suspended for beer, not for other drinks categories.

Unknown said...

Mudgie, irrespective of where the price point is, prices going up, especially when out of proportion to inflation, is going to be a problem.

Quite right on VAT too.

As for the margin, it's there to take care of paying for the added value that the pub provides. A point none of us, me included, do enough to champion.

I have no real quibble with CAMRA over this. They are shouting about something that needs to be shouted about. Just because I don't quite agree with the way they are shouting does not mean that either I think they shouldn't be shouting, or more importantly, that their shouting won't work.

And yes, we don't really care if it stays on wine and whisky.

I think we might just get to 100,000 signatures and if we do, I'll happily take my hat off to CAMRA and even those goblin type creatures.

Cooking Lager said...

Unfortunately beer tax is a long way from entering the general publics minds. Fuel taxes are the ones that have reached the limit of acceptability. Beer tax is a cow that can be milked for a good while yet.

Unknown said...

Cookie, I'd agree that fuel tax is a greater concern to a greater number of people. However, alcohol duty is certainly becoming a concern to the industry. If we do nothing more than impress the fact on the general public that it will inevitably increase the price of alcoholic drinks, across the board, then I'll consider it a job well done.

Curmudgeon said...

If and when it is introduced, minimum pricing will have a much more obvious impact on the general public than a slow and steady ratcheting up of duty.

Unknown said...

Mudgie, I'm not happy about the idea of minimum pricing. It seems that the introduction of it might well be at a level that will not be noticed except on perhaps white cider. The problem is, it is likely to also be introduced as a slow but increasingly significant impact.

I'm against it as it will generate anti-competitive price fixing type effects

Jeff Pickthall said...

I doubt this petition will have any effect at all other than firing up a sense of righteous indignation in us beer drinkers, sellers and manufacturers.

Set against a background of distorted media coverage of alcohol ("binge drinking spiralling out of control" etc) and generally fucked national finances, this petition is likely to fall on deaf ears.

On a brighter note, I think I'm detecting more pubs declaring they are thinking of brewing their own, presumably motivated by the potential for higher margins otherwise being eroded by taxation. In my fantasy world, every pub would be a brew pub, so any small step in that direction is OK by me.

Anonymous said...

nice idea.. thanks for sharing..