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Osborne escalator will jack up price of pint by 5-10 pence

Added: Wednesday, March 21st 2012

Beer drinkers and brewers have united in condemning Chancellor George Osborne for imposing a further swingeing increase in beer duty in today’s Budget – even though he told parliament he was making no changes to duty. This is because he has kept the previous government’s “duty escalator” that automatically increases the tax on beer every year.

CAMRA – the Campaign for Real Ale – says the new increase in duty will push up the price of a pint by between five and 10 pence. The campaign lambasted the government for “a careless approach to one of Britain’s most rated institutions – the pub – as further inflation plus a 2% increase in duty will bring about yet more price rises at the bar and further job losses."

With around £1 of every pint going to the Treasury in duty and VAT, CAMRA has urged its 136,000 members and all pub goers to sign an e-petition to remove the beer duty escalator:

The campaign says the brewing industry and pub trade supports almost one million jobs and contributes £21bn in UK GDP and it condemns the government for imposing “punitive, successive tax increases that will impact on both breweries and drinkers.”

Mike Benner, CAMRA’s chief executive (pictured), says: “The fact that Britons are forced to pay over 40% of EU beer tax but consume only 13% of all the beer sold in Europe is remarkable. British beer in a pub is so heavily hit with duty and VAT, the tax man’s hikes amount to him guzzling a third of every pint served.”

SIBA, the Society of Independent Brewers, slammed the budget as “anti-beer and anti-pub”. Chairman Keith Bott said: “This is not a budget from a government that claims to support pubs as places that encourage social cohesion and responsible alcohol consumption. Once again we see a disconnect between what our policy makers say about beer and pubs and what they do – which is to impose further punishing taxes on an industry that’s on its knees.”

Bott berated the Treasury for failing to take any meaningful steps towards alcohol taxation reform. He said beer duty has increased by 35% over the past five years, putting it at a distinct disadvantage to spirits, wine and cider

There could be worse to come

Further price rises on beer cannot be ruled out. The serious drought in Britain -- especially in the grain belt of eastern England -- could mean that high-quality malting barley will be in short supply at harvest time. If brewers have to import barley, this will push up their costs, which will be passed on to drinkers in higher prices for beer.