Tuesday, 28 April 2009

Falling off a cliff

It has been widely reported today that UK beer sales were 8.2% lower in the first quarter of 2009 than in the comparable period last year. Perhaps surprisingly, and certainly in defiance of the conventional wisdom, sales in the off-trade fell almost twice as steeply as those in pubs, suggesting that at-home drinking is much more of a discretionary purchase than going to the pub, and something people cut back on when times are hard.

The fact that total revenues from beer duty fell despite higher duty rates calls into question the government’s policy of above-inflation increases. We are now clearly past the point of diminishing returns. And, given that overall consumption has fallen so sharply, you might imagine that they might let up on their campaign of anti-drink hysteria, but don’t hold your breath.

3 comments:

  1. I seem to remember that the All Party Parliamentary Beer Group wrote a report that indicated that an increase in beer duty would reduce the overall revenue.

    Yes, I was right, it's It's here

    ReplyDelete
  2. This seems to bring us to a point where the government would rather punish people than raise revenue, then we are indeed on a sticky wicket as logic and hard figures no longer convince.

    Combined with plunging alcohol sales, this seems like the economics of the madhouse. Or too much pandering to the anti drink lobby.

    ReplyDelete
  3. I don’t fully believe that the tax is necessarily the main culprit. Yes I suspect some blame can be attributed to it, but I suspect the ‘recession’ is the main reason. The two together is what has no doubt had the noticeable effect. Pure speculation, but if it wasn’t for the dire economic times I suspect the tax rises would have had much less of an impact, not that that helps.

    ReplyDelete

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