CAMRA & SIBA cheer as escalator axed

CAMRA, the Campaign for Real Ale, responds to the abolition of the Beer Duty Escalator:

Mike Benner, CAMRA Chief Executive said,

• “This is a momentous day for Britain's beer drinkers, who will tonight be raising a glass to the Chancellor for axing this damaging tax escalator and helping keep pub-going affordable for hard-pressed consumers. This decision will keep the lid on the cost of a pint down the pub.”
   
•  “Since the duty escalator was introduced in 2008, 5800 pubs have been forced to call last orders for good. What could have been the final nail in the coffin for our pubs has been decisively avoided by the Chancellor in a move that will spark celebration in pubs across the UK.”
   
•  “Scrapping the beer duty escalator, combined with a 1p cut, is a massive vote of confidence in British pubs and will lead to an increase in pub going and more money in the Chancellor’s coffers.”
   
• “Today’s decision is a huge triumph for CAMRA’s pub campaigners who have been building overwhelming public support for a fair deal for beer and pubs, pub by pub and beer festival by beer festival. Over 108,000 consumers signed an e-petition and more than 8,000 consumers have written to their MP calling for a fair deal for beer and pubs. A Mass Lobby Day organised by CAMRA saw over 200 MPs meet with their constituents who highlighted the severe damage caused by the escalator.”

Chancellor praised for 'lifeline to pubs and communities'
By reducing the duty on beer by one penny on the pint, the Chancellor is offering a lifeline to pubs and their communities across the country, says the Society of Independent Brewers (SIBA).
SIBA chairman Keith Bott said, "We are delighted that the Chancellor has listened to the many voices calling for an end to the duty escalator - and then gone one step further by cutting a penny off the pint. It will be universally applauded by the cash-strapped drinkers, struggling licensees and a growing number of MPs across the divide who have campaigned long for this.
"A pint of beer should be an affordable pleasure rather than an occasional treat, and by stopping the escalator and taking a further penny off a pint,  the Government is ensuring that draught beer - a relatively low-alcohol drink - remains Britain's favourite tipple, as it has been for centuries.
"This move will generate growth and jobs in brewing, one of Britain's few remaining manufacturing industries, and in pubs - both sectors that employ high numbers of young people. The revenue to the Treasury from this investment will far outweigh whatever they might have earned from beer duty."
Bott continued, "Local brewers benefit from Government investment in the form of Small Breweries' Relief, which enables them to invest for growth, resulting in a 25% increase in the number of people working in the sector last year.  We hope that this beer-friendly Budget from a Chancellor who clearly has been listening to the industry and to drinkers, will help pubs to thrive again at the heart of their local communities."

Chair of the All Party Parliamentary Save the Pub Group, Greg Mulholland MP, has welcomed today’s announcement by the Chancellor in the budget statement of the scrapping of the unfair beer duty escalator and a 1p reduction in beer duty. Mulholland has been at the forefront of the campaign to see the escalator scrapped including securing a Parliamentary debate on the issue on the back of the e-petition that now has over 100,000 signatures, as well as meeting with the Treasury Minister responsible, Sajid Javid, on a number of occasions to discuss the issue, including just last week.

The beer duty escalator is an increase in tax on beer by 2% above the rate of inflation introduced in 2008 and in place until 2014/15. As a result, tax on beer has gone up by over 40% since 2008.

The beer duty escalator has proven damaging to brewers across the country and led to increases in beer prices. These price increases are absorbed by the supermarkets, however, pubs are simply unable to do this which can further increase the difference between a can in the supermarket and a pint in the pub and figures clearly show that people are now being put off by the price of beer in some pubs.

Greg has also previously called on the Minister to insist on a guarantee from the big pub owning companies that if, as we hope, the beer duty escalator is scrapped, that they pass this on and lower prices to their tenants so that this extra revenue is passed on to licensees and to pub customers and not simply into the pockets of the large pub companies to service their unsustainable debt levels.

Greg commented:

“Following all the hard work by so many groups, including CAMRA, to see the beer duty escalator scrapped in the 2013 budget, I am absolutely delighted that the Chancellor, George Osborne has today listened to the arguments against this unfair tax and brought it to an early end and reduced beer duty by 1p. This will be a boost to claims of being a pro pub Government.

“It has been evident to see that as a result of the reduced duty under the Small Breweries Relief we now have a thriving brewing industry, with over 1,000 breweries in the UK, the most the UK has seen for over 70 years. This clearly shows that lower duty leads to growth, investment and jobs in the brewing sector and I am delighted that the chancellor has today made a vote of confidence in Britain’s breweries.

“It is also good news for pubs, as supermarkets were able to absorb the increase in the price of beer, pubs were simply not able to and this was further increasing the difference between a can in the supermarket and a pint in the pub, which is a controlled and sociable environment. So I am delighted that it has today being brought to an end.

“It is now essential that the benefit of scrapping the escalator are passed on to pubs, so we now want to hear from all the large pub owning companies that they pass this on to licensees by looking at their own prices lists which will help publicans and help pub customers”.

Jonathan Neame, Shepherd Neame chief executive said: 

“It is fantastic to see the government recognise the importance of British beer and pubs.

“By scrapping the beer duty escalator – and then reducing beer duty by a penny a pint – the Chancellor has provided a great boost for the sector.

“British beer was on course to become the most heavily taxed in Europe which, in turn, would have put an unsustainable burden on the country’s brewing and pub sector. Today’s announcement is a clear statement that the government recognises the industry’s valuable contribution to both the economy and society at large.

“We must thank our customers, our licensees and campaign groups across the UK for their support in helping to show our industry’s vital role and potential for the future.”

 McMullen, the family-owned brewery in Hertford, has welcomed the scrapping of the beer duty escalator.

McMullens is delighted that the Chancellor has at last recognised the damage that has been done by excessive taxation of the beer and pub industry over many years.  Additionally, the proposed £2,000 employment allowance for small businesses, aimed at reducing employers’ national insurance will potentially help our self employed tenants so this is also a very welcome development.  “We are particularly grateful therefore to all our local MPs for their support in getting the message across to the Treasury” said Peter Furness-Smith, Managing Director of McMullens.

“As far as pubs are concerned there is still much more to be done to ensure a competitive level playing field with supermarkets but this small reduction in beer duty is a very positive move and particularly appreciated at this time when we know how little room the Government has in which to manoeuvre in the current economic climate” continued Peter.

McMullens Brewery will implement in full all the changes in duty on beer, cider, wine and spirits, as announced by the Chancellor, on all deliveries from our warehouse from next Monday 25^th March.

All tenants make their own pricing decisions which will have to take into account the increase in their other major costs over the last 12 months, such as rates, energy and wages, along with the recently announced changes in duty which will be passed on to them.

In McMullen’s managed pubs where we price in multiples of 5p we have decided to reflect the impact of all the duty changes (beer down 1p but cider, wine and spirits up) in two ways - firstly, by reducing the price of a pint of draught beer by 5p in 26 of our community pubs and secondly, in our other managed pubs, we will donate the net benefit of the duty changes to charity instead of reducing the price of beer by 1p per pint.  We calculate the net benefit to amount to £20,000 over 12 months which we will share between a number of local charities.

“McMullens will not profit from this helpful beer duty reduction and we hope that our customers will approve of the action we are taking as we continue to strive to ensure that all our pubs consistently offer excellent value for money” said Peter.