Alcohol pricing and taxation policy has been hitting headlines in the build up to Government consultations for tax (closing today) and Licensing (8th September). So here's a bit of a round up on what's been going on:
Alcohol Concern has said tax on alcohol should rise by 10% to reduce deaths, fund treatment and discourage the production of extra strong beer - see Telegraph report or Alcohol Concern press release. Chief Executive Don Shenker said:
“The current alcohol duty regime actually encourages irresponsible drinking, with strong ciders being taxed at a quarter of the equivalent rate for beer. Higher and more consistent alcohol taxes for stronger products would deter producers and consumers who would switch to lower strength beers, ciders and wines. The additional revenue raised is urgently needed to support dependent drinkers who are now growing in number. However, to ensure the full duty rate is reflected in the price, retailers would have to abide by a minimum price too.”
Alcohol Concern submitted evidence to the Treasury pointing out that cider is taxed at the same rate whether it contains 1.2% alcohol by volume or 7.5%. For wine the tax rate is the same for 5.5% to 15% products. The charity proposed 3 smaller tax bands to better reflect strength but they dismissed the idea of banning sales of alcohol below cost, instead calling for minimum pricing. They referenced a snapshot analysis of 25 products in Asda which showed that none of the drinks surveyed would be affected by a below cost ban, despite some being as low as 18 pence per unit of alcohol.
Asda have already stopped selling alcohol below cost defined as duty + VAT, an approach supported by some other retailers and bodies. Drinks giant Diageo, who too want changes in the tax structure, also support of of a duty + VAT definition for cost but deny any link between price and consumption - see Telegraph report. But Alcohol Concern recently dismissed Asda's move as 'a desperate and cynical attempt to stave off future government legislation'. The Morning Advertiser has previously reported fears that the 'Off-trade can beat below-cost ban' with a duty + VAT definition; the BBPA said production and distribution costs should be included.
Current consultation on the Licensing reform asks stakeholders views on how a 'below cost ban' should be defined.
Comments