Jeremy Hunt’s plan to freeze draft beer rights received a mixed reaction from the pubs industry today, with Wetherspoon boss Tim Martin welcoming the move, but one owner dismissed it as a “velvet-gloved punch”.
Amid sweeping changes to the way alcohol is taxed announced in his budget, the Chancellor said the tax levied on draft beer and cider would not rise in line with inflation in August. Instead, a pint pulled by a pub would be 11 pence less than store-bought alcohol.
Mr Hunt said the move was part of the ‘Brexit pub guarantee’, which ensures that ‘pubs will always pay less tax on a pint than supermarkets’.
Mr Martin welcomed the duty freeze but insisted more needed to be done to close the gap between pub and supermarket taxes.
“Any reduction in the tax disparity between pubs and supermarkets is welcome,” he said. “We have been campaigning for tax equality for a long time. This gesture from the government is a tacit recognition that something needs to be done.
Tim Martin, chairman of JD Wetherspoon, welcomed the draft beer duty freeze but insisted more needed to be done to close the gap between pub and supermarket taxes.
British Beer and Pub Association chief executive Emma McClarkin said Mr Hunt’s announcement was ‘positive’
Mr Martin added: ‘We will investigate the extent of the tax disparity that remains after this decision. We remain of the view that anything less than equality is an unsustainable distortion and is economically counterproductive.
Nick Mackenzie, chief executive of Greene King, said the measure would provide only partial relief for homeowners, who face soaring energy bills when an existing government support program ends in April.
‘We are delighted to see the Chancellor has listened to the pub industry and increased the relief on draft beer, an important step to support the Great British Pub,’ he said.
“However, the devil is in the details, and we fear the prolonged relief from the project still does not alleviate the difficult headwinds that UK pubs are facing.”
Mr Mackenzie added: “As duties are primarily paid by suppliers, such as breweries, it is essential that any benefits are passed on to venues to help achieve the government’s aim of reducing inflation and developing the economy. economy.”
Under a 1992 EU directive, variable duties on beer could only be applied based on alcoholic strength, not place of sale.
In his speech yesterday, former Remainer Mr Hunt framed his announcement as a Brexit dividend.
“I’m going to do something that wasn’t possible when we were in the EU and dramatically increase the generosity of Draft Relief,” he said.
Nick Mackenzie, managing director of Greene King, said the move to freeze beer taxes would only bring partial relief to owners
Dawn Hopkins, campaign vice-chairman for pubs and owner, asked if the government really wanted to help pubs
Mr Hunt told MPs the beer tax change would also apply to ‘all pubs in Northern Ireland’ due to the Windsor setting unveiled by Rishi Sunak more than two weeks ago, but which has not yet been adopted by the deputies.
He added: ‘British beer may be hot, but the duty on a pint is frozen.
The favorable tax treatment for draft beer has been called “welcome” by the Campaign for Real Ale.
But Mr Hunt’s announcement was described as a ‘velvet-gloved punch’ by the Pub Campaign – who also slammed the Chancellor’s ‘rude’ reference to traditional ales as being served ‘hot’ ‘.
‘If the government were serious about supporting pubs and hospitality, they would have retained that support, reduced VAT and finally announced the long-awaited overhaul of the business charging system which they have repeatedly promised,’ said his deputy. -President, Dawn Hopkins.
“The rude hot beer comment shows that Jeremy Hunt is not going to the pub and he certainly does not understand the serious situation in which pubs, publicans and small brewers find themselves.
“We will lose even more pubs and small breweries from our country if this government continues to ignore calls for targeted support.”
A move to tax drinks based on their alcohol content – the stronger the drink, the higher the tax – means millions of drinkers risk seeing the price of red and white go up by 20% – or 44p per bottle – according to the Wine and Spirits Trade Association
Other critics pointed to wider tax changes that will affect the cost of a bottle of wine and spirits.
A move to tax drinks based on their alcohol content – the stronger the drink, the higher the tax – means millions of drinkers risk seeing the price of red and white go up by 20%.
This will add an average of 44 pence per bottle, according to the Wine and Spirits Trade Association – the biggest tax increase in half a century on a bottle of red or white.
In addition, in all areas, the alcohol tax will increase with inflation – 10.1% – on August 1.
Together, these measures have been criticized as a “two-pronged tax raid” on drinkers.
British Beer and Pub Association chief executive Emma McClarkin said: ‘The reduction in draft duty as part of liquor duty reform is positive and we hope it will give a boost to our ads this summer.
“However, the fact is that our industry will face an overall tax increase, not a reduction, in August.”
In his speech yesterday, former Remainer Mr Hunt framed his announcement as a Brexit dividend
Miles Beale, chief executive of the Wine and Spirit Trade Association, added: ‘The government’s decision to punish wine businesses and consumers with a 10% duty increase for spirits and 20% for wine, from of August 1, is staggering. This is the largest increase in wine duties since 1975.
“This budget directly contradicts what this government claims to be trying to fix. This will further fuel inflation. This will further add to the misery of consumers.
Nuno Teles, of Diageo, the makers of Johnnie Walker whisky, said ‘the decision is a hammer blow… We urge the Chancellor to reverse this punitive and inflationary tax hike.’
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