A taxing issue

The industry-funded group behind “There’s a Beer For That” has now transformed itself into Long Live The Local, which is campaigning for a cut in beer duty. This is being championed by, amongst others, supermodel turned pub landlady Jodie Kidd. Now, cutting beer duty, and indeed alcohol duties in general, is undoubtedly a worthy cause. The UK only accounts for 12% of the beer drunk in the EU*, but pays 40% of the duty. High duties distort the market, place a burden on less well-off consumers, and mean that quality is compromised as products are tailored to meet particular price points. They’re also highly regressive in their impact on the population.

But it’s questionable to what extent a beer duty cut would do very much to increase trade in pubs. As I’ve argued before, the decline of pubs vis-a-vis the off-trade has been driven by a list of factors, most of which have nothing to with price. In broad terms, changes in social attitudes have meant that the range of occasions when people will even contemplate a visit to a pub just for a drink has steadily diminished. Responsible people who aren’t on the breadline, which is most of us, don’t go to the pub because the opportunity doesn’t arise, not because they can’t afford it. Would you really go to the pub substantially more if beer was even 50p a pint cheaper?

Well-meaning people who say they’re pub-lovers decide, for valid enough reasons, that a pub visit isn’t on the agenda in a range of situations when their predecessors thirty or forty years ago might well have done. And it must be remembered that, in the past, pubs were sustained by a core of customers who, not to put too fine a point on it, were heavy drinkers – the blokes who were getting through numerous pints on most nights of the week. That’s much less common, and much more frowned upon, now, and the people who still do drink in that way are doing it more at home with a slab of Carling. Pubs aren’t going to thrive on customers who drink a couple of two-thirds of craft beer a week.

Yes, cutting duty would help pubs a bit, not least in putting them on a firmer financial footing, even if it didn’t result in lower prices over the bar. But it’s wrong to see it as any kind of magic bullet for the trade, and “beer tax is killing pubs” is at best a gross over-simplification. And it rings rather hollow when there can be such a wide variation in beer prices between different pubs. Within a mile of my house, I can pay £2.50 or £4.00 a pint for the same or very similar beers. If the pub trade as a whole really thought price was such a significant factor, then you might expect it to make more of an effort to be price-competitive.

There are things that government could do to help pubs, specifically to relax the smoking ban somewhat and to stop the demonisation of moderate drinking in public health messages. But, realistically, it’s highly unlikely to do either of those things. If the industry wanted to concentrate in a taxation campaign that really would make a difference to the viability of pubs, then it might be better to focus on reforming the system of business rates. But that isn’t something that resonates with the drinking public in the same way.

* Until 29 March next year, obviously