100 Million Pints of Beer Unsold Because of Taxes

October 24, 2012 Taxation in UK

AleLONDON – Taxpayers in the UK are putting down their glasses and buying less beer, as excessive hikes to excise duties deter consumers.

On October 23rd the British Beer & Pub Association (BBPA) released its quarterly Beer Barometer report, claiming that the government’s current policies on the taxation of beer are leading to significant decreases in the sales of the drink, and are also having a direct negative effect on the economy and the country’s hospitality industry.

According to the BBPA, the sale of beer in pubs in the country during the third quarter of the year fell by 4.8 percent compared to the same time in the previous year, and the sale of beers from licensed retailers fell by 6.5 percent compared to last year.

The fall in the sales is equivalent to 66 million fewer pints being sold in the supermarket during the quarter, and approximately 51 million less pints being sold in pubs.

The BBPA attributes the decreasing sales to the effects of the “beer duty escalator” system which raises the excise duties on beer by 2 percent above inflation every year.

Since the system was first introduced in 2008 it has led to the price of beer increasing by 42 percent.

In an effort to show the ineffectiveness of the excise hikes, in its report the Association pointed to a recent study conducted by Oxford Economics showing that a further 5 percent increases to taxation on beer will only produce a GBP 92 million rise in tax revenues, but all the positive effects will be negated by the loss of over 5 000 jobs in the beer industry.

Photo by harry harris

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