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Category Archives: taxation

Don’t be fooled

I’m writing this just after hearing the budget and talk of alcohol duty.

It’s being widely reported that there is no change to alcohol duty.

What they actually mean is there is no change to duty policies in place. The beer duty escalator (BDE) in means that until 2015, beer duty will rise at 2% above inflation every year.

So, to all those reading that there are ‘no changes’ who aren’t aware of the beer duty escalator, you’re likely to be handed a 5.4% rise in the price of a pint from tomorrow, not exactly great reporting. Imagine having to explain to your customers that yes, there was ‘no change’, but actually that’s just ‘no change in policy’ so now there is a 5.4% rise, and no, you’re not making more money from them.

Once again, putting the squeeze on the public, publicans and brewers.

I wrote to my own MP about the BDE, and she basically told me that the revenue made from excise duty is needed, but the government make it easier to let bands play in a pub or communities can step in and take over struggling pubs. Missing the point as ever there Chloe.

What she’s failing to realise is why these pubs are failing in the first place. I’m sure we all have our own opinions on why this is, and I wont bore you with my views.

As I’ve said many a time, we’re not going to be the last brewery to stop production this year, and this latest duty hike might just make a few more decide to close the doors.

There is something you can do about it though…. sign the E-petition. It doesn’t guarantee change, but just sitting there complaining wont change anything either.

http://epetitions.direct.gov.uk/petitions/29664

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Don’t snuff out the green shoots

As you probably realise, brewing is pretty close to my heart. I love the beers that this country produces. What I don’t love, is the way that this vibrant and growing industry (yes one of the few we have left) is being taxed out of existence by this and previous governments. Contrary to popular belief, brewers do not make a lot of money. Even those who produce high ABV beers that are more expensive aren’t making much, such is the duty and taxation system in place.

There are many e-petitions around at the moment, this one urging you to sign up to stop the Beer Duty Escalator, and here another one urging the government to drop the higher rate of tax on beers brewed at 7.5% ABV or higher. Why so many? Well, simply put, the government needs money. We all know that. Brewing is seen to be doing well. Even though pubs are still struggling, more and more breweries are opening around the UK, over 840 exist already. (according to Quaffale there are 30 or so opening soon), anecdotally I have heard of 6 in Norfolk alone planned for this year. So, easy target? Maybe.

Northcote isn’t the only brewery to have closed this year. I am damn sure we wont be the last. The existing breweries and the pubs they serve will end up being squeezed out of existence with all these hikes in duty and taxation, the duty escalator will not stop. And let’s not forget, duty isn’t the only extra cost faced. The raw ingredient costs are rising, not to mention energy and transport. These can’t be that easily absorbed in an already stretched brewery, small or otherwise. Pubs are having a hard time, they don’t want to pay more for beer, and have to put that costs onto their customers. The consumer doesn’t want to pay more for their pint  – many are pushing £3 as it is for a ~3.8%. And let’s be honest, there are only so many free houses and beer bars that can support local breweries or those that produce stronger or different from the norm beers. The larger and regional breweries are struggling, having to discount so heavily as to make their beer virtually profitless. This simply can not carry on.

I know this is all painting a very grim picture of the future. I’m trying not to come across as a panic merchant. Perhaps being an armchair warrior isn’t going to make a jot of difference. But signing these petitions is a start. Nothing will change either if we scoff at them, and least you will have given the matter more than a few seconds thought. By signing them you’re showing your support for the vibrant and diverse brewing industry that exists in this country. Don’t let it be taxed out of existence. Let these new and existing breweries have a chance, let’s have an industry to be proud of and that is truly supported by those in power. Let those tiny green shoot grow. Please.

Stop the Beer Duty Escalator.

Drop the 7.5% Duty Rate (although this one was designed to prevent the duty hike coming in, if there’s enough support it could help revert it).

In the drunk tank

The latest government plans to tackle binge drinking? Bring in the drunk tanks and a minimum pricing limit.

Drunk tanks are designed to stop the antisocial behaviour of those who have overly indulged, potentially to prevent harm to others and themselves. The idea that removing them from the streets will mean less drunken behaviour on the streets, and by assumption lower A&E admissions.  According to the Cameron, £2.7 billion is the cost to the NHS of binge drinking. However, this does not take into account the revenue raised from duty and vat on alcohol as pointed out this morning by Pete Brown on Twitter: ‘Spurious ‘cost’ of drink to NHS: £2.7bn. Real govt revenue from duty and VAT on drink: £15,8bn. Funny how papers don’t report that last bit.’ And also that ‘Govt last week announced it’s changing how alcohol-related admissions are calculated cos they know it’s wrong. But quoting those figs today’. Pete also points us to this article at Political Scrapbook about how Mr Cameron earned £84,000 from bar chain Tiger Tiger – one of those bars well known for selling cheap booze.

I do wonder about the logic of locking a group of hammered people up in a cell together where they can argue and fight, is that really a good idea? What if someone becomes ill, or is injured whilst in the drunk tank – presumably they become the responsibility of the police force who have detained them. And these temporary cells to be used as drunk tanks… where will these come from? It’s been reported in the past that our police cells are already over crowded to help ease prison overcrowding. In this age of austerity, spending cut backs in the public sector just where is the funding for this going to come from – oh yes! The tax payer – you and I.

The minimum price per unit has been debated with plenty of arguments for and against. Tandleman’s Beer Blog discussed it on Monday, basically stating that those who want to get out of their minds on alcohol will continue to do so anyway, by whatever means. Worrying reports such as this one  issued by Liverpool council warning about ‘fake’ vodka – an industrial alcohol unfit for human consumption – masquerading as a budget supermarket offering, are becoming increasingly common. The fact that people are going to the bother or producing these ‘fake’ alcohols would suggest there’s a market for them. A minimum price is not going to do a jot to help this situation, it is only going to make it worse.

I don’t know what the answer is. Some would say education. The % of the population who smoke has gradually fallen from around 65% for men and  40% for women in 1948 to around 20% for both sexes today according to Cancer Research. I am sure some of this is down to education, and awareness of the health risks associated with smoking. Are we going to see similar kinds of warnings on alcohol labels, a ban on advertising alcoholic drinks. It’s unfortunate, it’s the few that abuse alcohol that ruin it for the rest of us. It’s also true that many who abuse alcohol in their late teen and early 20s generally grow out of it. I am speaking in broad terms here.

I don’t really understand the big proclamations that the government are coming out with. According to the Institute of Alcohol Studies, and their own publication on binge drinking  the average weekly alcohol units per week have fallen since 1998. The % of the populace drinking more than the recommended limits have fallen. I am sure there may be fluctuations in this trend within age groups, but the general trend is downwards. So why the big announcements today? As for the impact on the NHS (this is a Scottish Study, I couldn’t find the details of UK as a whole), ‘There has been a fall in the number of alcohol-related discharges from general acute hospitals in Scotland between 2008/09 and 2009/10; the number of alcohol-related discharged declined from 41,977 to 39,278.’ Taken from ISD Scotland. So it doesn’t stack up. Binge drinking is on the decline, hospital discharges related to alcohol are falling as well. Why decide to take a ‘stand’ now?

Could this be an excuse to ramp up the revenue received from alcohol duty and VAT? Any more rises are going to really put the squeeze on many breweries, distilleries, pubs, bars, off-licenses and restaurants around the UK. At a time when this industry needs help, not more taxation, I can only fear what the latest knee jerk reaction will be to these so called revelations from Mr Cameron. We need growth in the UK to help us out of these awful economic times, not snuffing out what remains with taxation.