British pubs suffer due to high beer tax

n Britain, sales in pubs were down 6.0 percent quarter on quarter, but off-trade (off-premise for those of us in the States) sales were up 4.7 percent. Most analysts blame the Beer Tax hikes and unfortunately it looks like it could have lasting damage.

The British Beer & Pub Association (BBPA) is asking the public to sign an online petition to stop the tax increase.

Here is the press release from the (BBPA).

The BBPA believes that current pressures on the beer and pub sector, on which almost one million jobs depend, further highlight the poor decision of the Government to raise Beer Tax by a further five per cent in the March Budget – making for an astonishing 42 per cent tax hike since March 2008.

There is some comfort in the figures, in that beer sales are now falling at a slower rate than in the previous four years. Overall beer sales fell by 1.4 per cent in the quarter compared to last year. In the year to March 2012, overall beer sales were down 2.9 per cent, following the 7 per cent rise in beer duty last March.

The recent Budget tax hike was made under the controversial ‘duty escalator’ policy, despite widespread calls to rein in the rises. The BBPA and Oxford Economics believe this decision will cost some 5,000 jobs in 2012/13. A Government e-petition demanding an end to these punitive tax rises has already attracted over 28,000 signatures.

The decline in pub sales amounts to 57 million less pints enjoyed by Britain’s pub-goers, compared to last year’s first quarter.

Brigid Simmonds, Chief Executive of the British Beer & Pub Association, comments:

“These figures show the Chancellor was totally wrong to raise beer tax again in his Budget, as this discredited policy continues to hit pubs hard. This key British industry could be an engine of growth for the economy – but poor tax policy is damaging our potential. The public are getting behind calls for a change in policy, and signing the e-petition in their thousands. I hope people will continue to respond positively and back a tax freeze – and I hope the Government will listen.”

If you are in Britain and would like to sign the e-petition here:

According to the (BBPA). beer duty was increased by 5 percent in the March 2012 Budget. The total increase in beer duty since March 2008 stands at 42 per cent. The Government’s controversial beer tax ‘escalator’ policy means increases of two per cent above inflation until 2014/15

They also note that beer sales support around one million jobs and generate nearly £8 billion in tax revenues.

Data for this study was sourced directly from the Association’s brewing members, and accounts for 93 per cent of all beer sold in the UK. A change has been made in the methodology of the calculations in this quarter’s Beer Barometer, to better reflect the entire UK beer market including imports and the microbrewery sector. Previous data has been readjusted accordingly.

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