Sunday, 21 February 2016

Moral duty

The British Beer & Pub Association, together with CAMRA, have been campaigning for the Chancellor to make a further cut in beer duty in his forthcoming budget. However, a group of pub operators have suggested that this campaign is morally flawed and has not really produced the benefit for the trade that has been claimed.

One of their main points is that the duty reductions have not been passed on to pub customers. Fair enough, but given that most prices are now rounded to the nearest 10p, few pub operators are going the knock a penny off and, in an environment of generally rising costs, it simply gives pubs a bit more breathing space. Plenty of pubs have increased their prices over the last couple of years although, to their credit, Sam Smith’s have held the price of OBB firm at a very reasonable £1.80 a pint.

As I’ve said before, from a presentational point of view, it would have been better for Osborne to freeze beer duty rather than slightly cutting it, as he has done with fuel duty. That would have stopped all these complaints about “what’s the point of a penny off duty?” And, realistically, the current level of duty should be compared to what it would have been if the escalator had still been in force. Over three years, that would have led to the price of a pint in a pub being 20-30p higher, which would undoubtedly have harmed their business and led to more closures.

Given a clean sheet of paper, I would certainly set alcohol duties at a much lower level than we have at present. But, in the current situation, it may well not be the best use of the limited funds available to the Chancellor. For the time being, I would be quite happy for them to be frozen for the length of the current Parliament, and there is a risk that those supporting a reduction may be portrayed as irresponsible.

The complainers also seem to be a group of pub operators not noted for charging bargain basement prices, so you have to question exactly how bothered they are about lowering the cost to the drinker. They also come up with the usual self-serving guff about pubs being a “controlled drinking environment” and make the ludicrous claim that you can get a standard bottle of 11% ABV white wine for £3 in Tesco. Well, I’d love to see that in my local branch.

I would be happier if CAMRA and the BBPA were advocating a duty freeze, not a cut. Ending the duty escalator was perhaps CAMRA’s greatest ever success, but the momentum and goodwill are steadily diminishing. And the pub trade over the years has collectively shot itself in the foot by continually increasing prices above inflation.

14 comments:

  1. Apart from beer bloggers and CAMRA walla's, is there any evidence people actually use pubs anymore? If so why?

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    1. Ah, that would be for fun.

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    2. I saw plenty of evidence, Saturday night, of people using pubs. I would say I was the only CAMRA member and beer blogger amongst them as well.

      People are definitely still using pubs in this neck of the woods; perhaps the situation's different up in the grim North!

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    3. Just cos you're no fun anymore, Cookie...

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  2. With brewers and licensees alike slapping on 10p a pint rises, the call for a 1p cut in duty is a complete waste of time. CAMRA have sent me cards, asking me to lobby my MP over this issue. They have gone straight on the fire!

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    1. but beer duty is of course just one element of a pubs cost base that directly impacts the cost of a pint, take Wetherspoons who are already seeing the cost of matching the national living wage,which the chancellor introduced in the last budget, impact on their trading numbers due to increased labour costs and is likely to be an even higher hit this coming financial year, or increases in transport costs, heating, electricity, local business taxation,that free wifi that all beer bloggers insist true pubs should have thesedays, or even just the straight up costs of the raw materials to brew the beer as more breweries try to hoarde as many hops they can.

      so the beer duty was cut 1p, but everything else goes up, so the price of the beer rises, if the beer duty wasnt cut, maybe thats the final bit that pushes the pub as a profitable business into a terminal spiral decline.

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  3. There are 3.34 CAMRA members for every pub in the UK. Supporting an entire industry just by ourselves is a terrible burden we have taken on.

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    1. That's more punters than most pubs have.You beards are slacking.

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  4. Taking VAT off beer would do more than freezing or even cutting the duty on it.

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    1. It would, but not really politically feasible.

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  5. There's aren't going to be any more conspicuous cuts in duty or tax or rates or whatever aimed at helping the brewing or pub industries for the foreseeable future.

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    1. Agreed. The "Axe the Escalator" campaign have got far more than they wished for, with small cuts in beer duty for three consecutive years. The best they can hope for is a continued freeze.

      But businesses have to adapt to the tax regime they are working within. There comes a point when "waaah tax!" just becomes an excuse for failure.

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