Government makes five times more money from beer than pub companies

9th December 2009, 10:39am

The Government makes over five times more money from the sale of beer in Britain than do the nation's brewing and pub companies, according to new research released this week.

The study by Oxford Economics for the British Beer & Pub Association (BBPA) compares the Government's tax take on beer with the profits made by the brewing and pub sector on the sale of beer. The numbers show that the total taxes – excise, VAT employment and corporation taxes - raised by Government on the sale of beer amount to £7.2 billion. At the same time, the profits of the brewing and pub sector on beer sales amount to £1.4 billion.

The total beer market in the UK generates £19 billion in revenues. When the profit and tax receipt numbers are added together, Government takes an 84% share of the £8.6 billion total tax and profit generated by beer sales.

Brigid Simmonds, chief executive of the BBPA, said: "This analysis highlights a considerable and unsustainable imbalance in who makes what from sales of beer in Britain. Government is extracting enormous value from the beer sector in tax, while the profit margins of the companies that make and sell beer are being squeezed wafer thin.

"We fully acknowledge that taxes on beer play an important role in the public finances, particularly at this difficult time. However, it is important they do not become unsustainable and restrain the ability of the sector to invest and grow. Government is in danger of slowly strangling the goose that lays this golden egg."

The latest opinion polling clearly shows the British public also believe that beer taxes have become unbalanced. Nearly two thirds (65%) believe that with almost a third of a pint now going to the taxman, beer taxes are too high. Nearly three quarters (74%) believe any further increases in beer taxes would be unjustified. 61% think that Government should use the Budget to help the British beer and pub sector.

Simmonds continued: "It's time for better balance and sustainability in Britain's beer tax policy. We want to work with Government on a new approach. One that does not penalise beer drinkers and pubs. A policy that recognises pubs as a community asset and seeks to support the economic and social contribution of the sector, both nationally and locally."

Related Articles:

• 29 Oct 2009 - Beer sales slide continues to slow
• 28 Sep 2009 - Two-thirds of a pint measure set to be introduced
• 31 Aug 2009 - BBPA publishes statistical handbook
• 26 Aug 2009 - Industry reacts angrily to banning of beer tax advert
• 29 Jul 2009 - Beer sales are beginning to improve, says BBPA
• 22 Jul 2009 - Pub closures rise to record 52 a week

Click here to submit a comment!

Have your say!

To comment on this article, simply enter your name and email and send us your views. Please note that your comment will appear publicly below this article once it has been processed. For enquiries please email info@eatoutmagazine.co.uk.