The HM Treasury today announced plans to change beer duty for certain strengths as part of Government plans 'to review alcohol taxation to tackle problem drinking without unfairly penalising responsible drinkers, pubs and important local industries.'
The Treasury announced its plans to introduce a new additional duty on beers over 7.5% abv in strength and a reduced rate of duty on beers at a strength of 2.8% abv or below. The changes are intended to 'encourage the production and consumption of lower strength beers' whilst 'addressing the consumption of cheap, super-strength lagers'. They are expected in the next budget in March 2011.
See the HM Treasury Review of alcohol taxation November 2010 [pdf].
Trade associations such as the British Beer and Pub Association (BBPA) welcomed the break for lower strength beers. However the Association of Licensed Multiple Retailers (ALMR) said the review was a “missed opportunity” to make a real difference to the “pocket money prices” being charged by supermarkets. See full quotes from trade bodies in reports from the Morning Advertiser and Publican. See press coverage from the Telegraph and Guardian.
Commenting on the proposals on tax and plans to ban below cost sales, Alcohol Concern's Don Shenker said:
“A much more effective approach would be for cider duty to be bought in line with beer; and for there to be low, medium and high strength duty bands on all products including wine. In addition, to effectively stop retailers from loss leading, duty rises must be accompanied by a minimum unit price of 40p or more. There is nothing in these proposals which would stop 2 litres of high strength cider from being available for under a £1."
Earlier this year the IFS made recommendations on alcohol taxation, whilst Dr Sheron suggested rises should be offset by reduced VAT for pubs. The definition of ciders was recently changed to prevent industrial white ciders enjoying the tax privileges of traditional cider.
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