Chancellor cuts beer tax for the third year running
The beer duty escalator, a system whereby beer tax was increased above inflation year on year, was the bane of UK brewers. However, after much lobbying from the brewers, the UK government saw sense and on 18 March 2015 the British Chancellor George Osborne announced that beer taxes will be cut for the third year running.
Commenting on the impact the latest tax cut is set to have on the UK economy, Brigid Simmonds, Chief Executive of the British Beer & Pub Association stated: “It will boost employment by 3,800 this year alone and attract new capital investment. It will put GBP 180 million (EUR 246 million) in the pockets of beer drinkers and pub goers. That is a huge difference.”
What this latest announcement shows to other EU governments is that a water-tight case can be made for beer tax cuts as a means of stimulating investment, growth, jobs and ultimately new tax revenues for the government too.
According to the Brewers of Europe, a lobby group, beer generates over two million jobs across the EU and there are now well over 5,000 breweries across the continent. The sector went through tough times after 2008, with consumption in the EU dropping by 8 percent in just two years and the hospitality sector particularly suffering.
At the same time many governments were increasing beer taxes in order to try and quickly gather money to plug gaps in their national budgets.
The Brewers of Europe say that increasingly governments, such as in Denmark and the UK, are also looking at the positive contribution the beer sector makes to growth, jobs and tax revenues. Hitting the beer sector with punitive taxes not only hurts the breweries but it also hurts the wider economy.
Tax cuts on the other hand can boost the beer sector, support the brewing value chain and help beer sustain the overall economy. Italian Brewers managed to avert one tax hike in 2014 but were then hit with a new one on 1st January 2015.
That is why the Italian brewers in March 2015 launched a new campaign to help consumers understand just how much of the cost of their beer is going to the tax man and the threat this poses to the sustainability of Italy’s burgeoning beer culture.
