Fair deal for beer would create 30,000 new jobs, says BBPA

1st September 2010, 8:30am

Around 30,000 new jobs would be created if the Government gave beer a fair deal in the alcohol duty system, according to a submission by the British Beer & Pub Association (BBPA) to the Coalition Government's review of alcohol taxation, published today.

The new research, undertaken by Oxford Economics for the BBPA, shows that the current tax system is discouraging the consumption of low-strength drinks such as beer – with lower tax revenues and fewer jobs the result.

The BBPA says the figures show there is a pressing need for the UK Government to use the current review to move the UK to a more balanced duty system that is much more in line with neighbouring countries.

Oxford Economics says that 29,500 jobs would be created, mostly in pubs and the wider hospitality sector, if the duty system was rebalanced between different types of drinks. When it comes to keeping pubs open, this would be a major boost in helping the Coalition to deliver on its own policies, as the new Government has recognised the link between tax rises and pub closures.

Instead, the current UK tax regime penalises beer, which is both low-strength and overwhelmingly UK-produced. The result is that alcohol in the form of beer costs 42p per unit on average compared to 37p for vodka, 38p for gin, and 33p for cider.

The Oxford Economics analysis looked at the impact on the UK economy of moving to a system more in line with Ireland, where the duty rate for difference types of drinks increases more significantly with strength.

In addition to creating 29,500 new jobs, the change in approach would bring in around £250 million in extra revenues, from employment taxes and corporation tax. With significant new jobs created, Government benefit payments would also be reduced.

BBPA Chief Executive Brigid Simmonds explained more: "The new Government now has a great opportunity to bring fairness into our duty system – with huge potential benefits for the Treasury and the UK economy.

"A fair deal for beer would create a win-win situation for all. Beer is unique among the main categories of drink, with Britain's pubs dependent on beer sales. Over 90% of the beer consumed here is brewed here.

"We've had many years of duty changes that have favoured other categories of drink - yet taxing beer fairly would create thousands of new jobs, and substantial extra tax revenues. Beer is also a low alcohol drink of choice and should be treated differently to other stronger alcoholic beverages. There is potential for a huge success story that could be grasped by the new Government. Everyone would benefit from a new and fair approach."

Related Articles:

• 14 Dec 2011 - New BBPA chairman appointed
• 09 Mar 2011 - New alcohol consumption figures prove the need for beer duty freeze, says BBPA
• 01 Oct 2010 - BBPA meets with Home Office on Licensing Law change

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