Industry calls on gov to scrap over-taxation of beer and pubs

Trade bodies representing UK brewers, publicans, and beer enthusiasts are calling on the Treasury to reexamine the tax burden currently facing the sector.

In an open letter to the chancellor, consumer group ‘One Voice for Beer’ outlined its support for the government’s Alcohol Duty Review, but warned that further action is needed in order to help the industry survive. 

The letter said its signatories “cannot ignore the fact that the tax burden on UK beer and pubs is still disproportionally high”.

It comes as pubs pay over a third of their turnover in one form of tax or another, while in comparison, the six US tech giants pay less than 2% of their UK turnover in corporation tax.

Similarly, UK Brewers pay over 40% of their turnover in taxes, primarily beer duty, whereas on-line gambling companies pay only 7%.

The signatories are now calling on the chancellor to “level the playing field for brewers and pub operators”, adding that beer duty should be reduced closer to the rate of duty paid by cider, which is significantly lower, over future budgets.

The group said that whilst welcome, pubs and brewers may “miss out” under the government’s target support for pubs announced in the Autumn Budget, with smaller kegs excluded from a planned ‘draught relief’. Currently only large kegs containing 40 litres or more of beer are set to be eligible under Treasury proposals.

Emma McClarkin, CEO of the British Beer and Pub Association, said: “Combined, the tough economic headwinds and legacy of disproportionate duties on beer and pubs mean that, even after a sensible and positive review of alcohol duties, our sector must ask the Treasury to go further.

“Pubs and the brewers contribute so much to our social fabric and economy yet brewing is one of the highest taxed business sectors in the UK. We urge the Chancellor to go further and back British beer and pubs as we build back better through 2022 and beyond.”

Tom Stainer, CEO, Campaign for Real Ale, added: “After two years of COVID house arrest, we need to get people off the sofa and back into the great pubs, clubs and brewery bars across the country.

“Making it affordable to go and enjoy local, independent beers in the safe, social setting of your local pub will bring a myriad of benefits, not just to drinkers, but the local and national economies.”

Rick Bailey, chairman, Independent Family Brewers of Britain, concluded: “Pubs will help our local communities come together after the torture of the past two years – they can’t do so weighed down by taxes and other costs.

“Now is the moment for the government to ease the unsustainable tax burden they suffer and level down their tax take to a position that is fair and equitable with other industries, so that pubs can step up to the plate as we get back to work and reopen the country.”