Now France joins Britain in attack on beer with massive 116 per cent tax increase
Added: Wednesday, October 31st 2012
The attack on beer and beer drinkers has taken on a Europe-wide dimension with the news today (31 October) that the French government plans to increase the beer on duty by 160%. This will lead to the price of a beer in a bar rising by around 20%.
It will have an impact beyond France. Belgian brewers, who export large amounts of beer to their neighbour in the south, are outraged and are calling for increased tariffs on imported French food.
France is the biggest export market for British beer. More than one million barrels from Britain were sold in France in 2011 – that’s more than the combined sales in the United States and Canada.
Francois Hollande, the French president, says the increase in beer duty is necessary to fund “social programmes”, including help to the elderly. No one would object to the elderly enjoying benefits that will keep them warm, clothed and fed, but the question arises: Why beer?
The French drink more wine than beer. Consumption figures for 2010 are:
Beer 30.5 litres per head a year;
Wine 47.1 litres per head a year.
The reason why the French government has chosen beer rather than wine is simple: wine is treated as an agricultural product in the European Union, while beer is classified as an industrial product. The French farm lobby is enormously powerful and has direct access to the levers of power in Brussels. A massive increase in duty on French wine would have enormous repercussions in France, with tractors blocking motorways and Paris streets.
A second argument put forward by the French government for the swingeing increase in beer duty is one that will be familiar to British readers: the need to tackle binge drinking. This is risible: people who binge on alcohol will merely switch from expensive beer to cheaper and far more damaging forms of alcohol.
Small brewers will lose out badly as a result of the duty increase. Final arrangements have yet to be agreed between the government and the tax authorities. Currently there are four bands of duty that enable small and medium sized breweries to pay less duty than bigger producers. But these may be reduced to just two bands and it could mean that artisan producers of bière de garde in the Calais region will end up paying almost as much duty as Kronenbourg.
The French government’s announcement comes on the eve of a three-hour debate in the British parliament on 1 November with a view to scrapping the beer duty escalator. The debate has been called as a result of a successful e-petition organised by CAMRA, the Campaign for Real Ale.
When the coalition came to power, Prime Minister David Cameron promised it would be a “pub-friendly government”. But he has done nothing to tackle the escalator that has done terrible damage to the pub trade. The escalator was introduced by the Labour Chancellor Alistair Darling and it automatically increases beer duty with every annual budget. Between 2008 and 2012, duty increased by 42%. More than two-fifths of the price of the average pint of beer goes in tax – duty, VAT, employment and business taxes – to the government. At the same time, the government has done nothing to tackle the market-distorting power of the supermarkets that sell beer as loss leaders to lure shoppers into their stores.
Between 2009 and 2012, 4,500 pubs closed – half of them while the current coalition government has been in power. Closures will continue, robbing communities of pleasant places to eat and drink, unless the government acts.
Within the EU, only Finland has a higher rate of duty than Britain. But there are just five million Finns compared to 62 million Britons and this means the British exchequer’s income from beer is the highest in Europe. The British consume only 13% of all the beer produced within the EU but pay 40% of all the taxes levied on beer within the union.
Unless action is taken urgently, then beer, brewing, pubs and bars will continue to decline in both Britain and France. In Britain, beer is the people’s drink and it’s time for the government to listen to the people.
CAMRA: Urgent action on beer tax needed as pub closures soar
* New figures show that 18 pubs now close across the nation each week*, up from 12 per week (September 2011 – March 2012).
* Debate on the beer duty escalator takes place in Parliament today as further figures show how more than 5,800 pubs have permanently closed since the beer duty escalator was introduced in 2008.
Published before today’s major Parliamentary debate on the beer duty escalator, CAMRA, the Campaign for Real Ale, has revealed how Britain’s pub closure rate has increased to 18 a week, with more than 450 pubs across the country lost since March.
The latest CGA-CAMRA Pub Tracker, covering the period of March-September 2012, reports an increase on previous findings (12 per week for the period September 2011 – March 2012), showing the extent to which Britain’s community pubs are "struggling against the burden of taxation, low supermarket pricing and poor consumer confidence."
With Britain’s pub closure rate now back on the increase, CAMRA has warned that the industry is in vital need of a successful outcome at today’s Parliamentary debate calling for a review of the social and economic impact of the beer duty escalator before Budget 2013. Since the beer duty escalator was introduced in 2008 -- a system which penalises Britain’s beer drinkers by automatically increasing duty by 2% above inflation every year -- CAMRA reports that more 5,800 pubs have closed. Beer sales also continue to plummet, with the British Beer and Pub Association last week reporting that UK beer sales have fallen by 5.6% from July – September alone.
In late September the CAMRA-backed e-petition calling for the abandonment of the beer duty escalator became the twelfth of its kind to reach the 100,000 signature landmark. This has triggered a Parliamentary debate ahead of which more than 3,000 beer drinkers have spoken out by urging their local MP to attend.
Speaking before this milestone debate for the beer and pub industry, Mike Benner, CAMRA Chief Executive, said: "Surpassing the 100,000 signatures required to trigger a debate was a major consumer-led campaigning success, but the real hard work begins now. For too long, Britain’s beer drinkers have been forced to endure inflation-busting rates of tax on their pint, while the Treasury’s own projections show that these hikes will fail to bring in any additional revenue over the next three years**.
‘As today’s pub closure figures show, the future of Britain’s valued community pubs remains in jeopardy. With pubs finding it ever harder to maintain consistent footfall at a time when prices are ever increasing, it is only hoped that Parliament will today take the first steps by voting to review punitive taxation policies on Britain’s National Drink."
Matthew Sinclair, Chief Executive of the TaxPayers' Alliance, said: "An escalator means consistent tax hikes on alcohol, which hits those on low and middle incomes hardest. What's more, high taxes mean we run the risk of making black market booze even more profitable. This leaves us with a yawning tax gap, and again it's hard-pressed families making up the shortfall. To close the gap, and to give people a break, the Government must take on board CAMRA's proposal to scrap the duty escalator so a pint of beer doesn't cost taxpayers the earth."