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'Another nail in the coffin of the British pub'

March 12, 2008: In a move trumpeted as an attack on Britain's binge drinking culture, Chancellor of the Exchequer Alastair Darling is to raise tax on alcohol by 6% above the rate of inflation.

And it will rise again by 2% over inflation for each of the next four years.

It means a 4p rise on a pint of beer, 14p on a bottle of wine and 55p on a bottle of spirit. The rise in tax on cider will be less than 2p a pint.

Not surprisingly, the drinks industry and the drinkers themselves have not reacted well to the news.

"This is yet another nail in the coffin of the traditional British pub," said Peter Amor, chairman of the Society of Independent Brewers (SIBA).

“By imposing such a large increase on the already unfair and punitive levels of tax on beer, the Chancellor is driving more and more people out of the controlled environment of pubs and into off-licences and supermarkets, where they can buy cheap alcohol, often at less than cost price.

“We have launched a campaign calling on the Government to adopt policies to support pubs, practically the only place where you can buy local quality beers, which play little or no part in the current wave of disorder on Britain’s streets. But the Government is clearly not in the mood to listen.

“It is also baffling that cider continues to receive preferential treatment, with less than half the increase in duty compared to beer.”

The Campaign for Real Ale (CAMRA) claims the increase will lead to at least 20p on a pint over the bar, fuelling pub closures and increasing unregulated drinking as more choose to drink at home or on the streets. This is the first time ever that beer tax has increased by 4p — a rise of 13%.

CAMRA recently announced that 57 pubs are lost permanently every month as the price differential between pubs and supermarkets widens. Pubs provide a regulated environment for people to enjoy alcohol socially and responsibly.

Mike Benner, chief executive of the consumer group, said, “The Chancellor has failed to recognise that well-run community pubs are the solution to Britain's binge drinking problems.

"This budget will do nothing to stop binge drinking, but it will lead to pub closures on a huge scale, widen the gap between supermarket and pub prices and encourage smuggling and cross-border shopping. It's a great big nail whacked ruthlessly into the coffin of the British pub.”

“Pubs are defined as local services, yet this tax rise, alongside other market pressures, will accelerate closures to unprecedented levels. The budget shows a disregard for our national drink and for the 15 million people who enjoy it responsibly."

CAMRA called for a cut in beer duty in the Budget to help pubs compete with supermarket prices. It believes that supermarket prices of beer are unlikely to be affected significantly by the tax increase, but pubs as small businesses, will have no choice but to increase prices at the bar.

Saying that the Chancellor "couldn't give a XXXX for Britain's pubs", Nick Bish, chief executive of the Association of Licensed Multiple Retailers, added: "Closed pubs can’t pay taxes. Only open pubs can. The Government had already created a climate in which pub closures were running at record levels. 2008’s Budget will make a bad problem much, much worse.”