Treasury ‘black hole’ on beer tax

The British Beer & Pub Association (BBPA) has renewed calls for a freeze in beer duty, claiming falling beer consumption coupled with tax hikes has created a revenue “black hole”.

The BBPA says the Government has seen tax revenues from beer fall by £29m in the past two tax years (2005/6 and 2006/7), with a decline of £17m forecast in the current tax year.

BBPA director of communications Mark Hastings said: “The black hole created by the policy of increasing beer taxes means the Treasury now has to review its addiction to beer tax hikes.”

He said that it was clear that increasing the tax rate on beer did not automatically result in more revenues for the Treasury.

“With so much pressure on government finances, raising duty makes no sense, as it not only punishes an industry under severe pressure, but it leaves the Government with less money for our schools and hospitals,” Hastings added.

Heaping pressure on the Treasury the BBPA insisted that beer duty revenues had undershot Treasury forecasts by £160m and £130m respectively in the past two tax-years. 

It argued that the Treasury’s planning models were “out of tune with the real beer economy” and did not recognise the reality that beer duty was “already at its revenue-maximising level”.

Drinkers against tax rise on alcohol >>

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BBPA calls for beer tax freeze >>

By Christopher Walton

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