The Campaign for Real Ale (CAMRA) has launched a piece of research conducted by Europe Economics into the impact of introducing a preferential rate of duty for draught beer.
The report highlights the benefits of such a measure — which is in place in Australia — which would allow the government to lower tax on beer sold in pubs as compared to supermarkets. CAMRA argues that this move will encourage people to enjoy a pint in the social, community setting of the pub, which will, in turn, encourage responsible alcohol consumption.
The research models several options and was launched at an event in the House of Commons. Key findings include:
- Cutting draught beer duty is an effective way of creating additional employment in the on-trade.
- A reduction would help move consumption from the off-trade to the on-trade. Cutting draught beer duty by 5% would create £26.6m of additional spending on draught beer, and 38% of this increase would be beer that would have been consumed in bottles or cans before.
- A 5% reduction in draught beer duty would be cost-beneficial for the Exchequer, saving £10m in taxpayer money compared to freezing beer, spirit, and cider duties in 2016, and is significantly less than cutting duties in each of 2013, 2014, and 2015.
A move to specifically support pubs with a preferential rate of duty was previously not possible under EU legislation, but can now be considered, as the British government plans for its future outside of the European Union.
CAMRA’s national chairman, Nik Antona, said: “A preferential rate of beer duty on draught beer is a radical proposal that will really help to save our pubs. This research is an important piece of work which demonstrates how much it would cost for the government to take real action and show their commitment to a Great British institution.
“We are delighted at the support shown by MPs today, which will help us keep the pressure on the Chancellor ahead of the Budget.”
CAMRA’s national chairman, Nik Antona (right), with Giles Watling MP
Giles Watling MP, who sponsored the event in Parliament and who is backing the proposal, said: “Pubs are important community assets and we need to do all we can to protect them.
“Unfortunately, previous freezes in beer duty, while welcome, have also allowed the supermarket to continue undercutting the pub with cheap alcohol. That was because of Single Market rules, which equalised rates between pubs and supermarkets.
“Now we have left the EU, I want to change that and differentiate the rate of duty so that it finally benefits and supports our pubs.
“The event in Parliament allowed us to educate Parliamentarians on this proposal, and I am glad so many colleagues took the time to show their support.”
Pau Salsas, managing consultant at Europe Economics, said: “Our research underlines the value of the on-trade sector in supporting jobs in the UK, and how job gains can be achieved with a modest reduction in the duty rate applied to draught beer.”
