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Chancellor: Phillip Hammond: all alcohol duties frozen, save an increase for higher-strength, lower-quality 'white cider'

Chancellor surprises, industry rejoices: beer duty is frozen

To the surprise of the brewing industry, which was expecting a retail price index linked increase in beer duty of around 3.5%, Chancellor Phillip Hammond instead froze duty in today's Budget announcement.

And the industry rejoiced, although some observers noted that there is more that could be done at minimal expense, such as SIBA chief executive Mike Benner’s call for a commitment to a duty freeze across the entire Parliament.

For now, though, the British Beer and Pub Association calculated that scrapping of an inflation rate increase will result in a saving of what would have been an additional £117 million in beer duty.

The Chancellor also froze duty on cider, wine and spirits save for duty on cheap, high strength low quality higher strength ‘white ciders’.

And for those ferrying around kegs and casks from brewery to bar the freeze on petrol and diesel duty was kept it place, as it has been since 2010.

SIBA chief executive Mike Benner said that the duty freeze was great news for brewers, pubs and consumers alike – but that more needs to be done.

“We’d now like to see the Chancellor go further and commit to a freeze in beer duty across the entire Parliament. An extension by one more year of rate relief for pubs and a move to CPI from RPI is also welcome but more action is still required.

“Whilst news for our sector has been positive from the Chancellor, brewers and pubs still face a tough trading period ahead with uncertainty around Brexit, and worsening growth and productivity figures. For now, though we will raise a glass of craft brewed British beer to the Chancellor."

Carlsberg UK VP corporate affairs Bruce Ray:

“This year’s cut will support continued innovation and investment, create new jobs, attract tourists and ultimately benefit our beer-loving nation. This is a wonderful achievement secured through cross-industry work, and we are pleased that government has recognised that a thriving and prosperous beer and pub industry is what our nation needs.”

CAMRA national chairman Colin Valentine:

“Freezing beer duty will help arrest rising beer prices and keep the British pub going tradition affordable. I will be celebrating this decision in my local this evening and I hope millions of beer lovers across the country will be doing the same.

“Now, to make a real, lasting difference we hope that this move represents the first step towards a long-term freeze. CAMRA is calling on brewers to match the Chancellor's support by holding beer prices so that local pub goers benefit."

BBPA Chief Executive Brigid Simmonds:
“The Chancellor’s decision to freeze beer duty and cancel his planned rise is an early Christmas present for beer drinkers and pub-goers worth £117 million this year and in subsequent years. It will secure over 3,000 jobs in pubs and the wider beer supply chain that would otherwise have been lost. This real-terms duty cut shows he has listened to our campaign and the concerns of pubs and pub goers, and acknowledged the special role that beer and pubs play in the nation’s social life.
“With over 80 per cent of the beer drunk in the UK brewed in the UK, he has understood the important capital investment made in the UK by our members. This is absolutely the right step towards a fairer deal for Britain’s beer drinkers and pub-goers and a vote of confidence in a very British manufacturing industry worth £23 billion to the UK economy.”

Diageo Great Britain managing director Charles Ireland

“The duty freeze provides some respite for Britain’s drinkers, although taxes on spirits remain amongst the highest of any major economy in the world. We have been greatly encouraged by the fantastic support of Parliamentarians from all parties, especially Ruth Davidson, David Mundell and the other Scottish Conservative MPs, who have called for a fairer deal for Scotch and spirits: an industry that generates £5 billion of exports and employs 50,000 people.

“We now repeat our call for a review of the alcohol duty system to deliver fairness for Scotch whisky, which is exactly the kind of unique British product the UK needs to thrive after Brexit.”

Larry Nelson
22nd November 2017

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