Beer duty to rise 7.5%

How much will these cost in September?

In today’s budget the Chancellor George Osborne announced that beer duty would rise in line with the controversial alcohol duty escalator. “I have no further changes to those measures put in place by the previous government,” he said – retaining the escalator introduced by the previous administration. Roughly speaking, it means duty on beer rises above and with the level of inflation – the figure is currently 2% above – so from midnight on Sunday beer duty will rise by 7.5%.

UK brewers pay an eye-watering rate of taxation on their products compared with their colleagues in Europe – higher even than the Swedish. Since 2008, duty in this country has increased over 33%. Coupled with the increasing costs of raw materials for brewing, labour costs and petrol for deliveries this latest rise is only going to make it harder for British brewers. CAMRA released a Budget response stating that over a £1 of every pub-bought pint goes to the taxman.

In December last year, we discussed the Government’s Review of Alcohol Taxation, where it was revealed that the 2011 budget would potentially see duty cut on beers under 2.8%abv and increased on beers over 7.5%abv. Ostensibly to cut down on ‘problem drinking’ – by raising taxes on a sector that constitutes less than 0.5% of British alcohol sales. This was today introduced into the budget by the Chancellor.

So in September tax on beers over 7.5%abv will go up by a further 25%. Back in our December article we argued that this will have no real impact on ‘problem drinkers’, and that brushing aside the consumers of ‘niche, premium’ products that fall within this category as being ‘not very price sensitive because they already pay a high price’ was insulting.

We are pledging now that for the whole month of September the BeerCast will only feature beer over 7.5%. Hopefully other bloggers will join us, as we give a boozy two-fingers to the taxman.

All in all, not a good day to be a beer drinker (or producer).