Budget 2013: Whisky-makers anger over beer duty cut

By CLAIRE SMITH
Published on 21/03/2013 01:30

GEORGE Osborne’s decision to increase duty on spirits while cutting tax on beer was branded “unfair and incomprehensible” by the Scotch Whisky Association.

The Chancellor scrapped a duty escalator – which has added a tax of 2 per cent above inflation to the price of a pint since 2008 – and went further by cutting the tax by 1p.

However the 5.3 per cent increase announced yesterday for wine and spirits will add another 10p to a bottle of wine and see the average price of a 70cl bottle of Scotch jump from £12.42 to £12.89.

Gavin Hewitt, chief executive of the Scotch Whisky Association, said: “This is an unfair and incomprehensible attack on the Scotch Whisky industry in its domestic market, where it is a vital part of the Scottish and UK economy.

“It penalises responsible drinkers who like a dram rather than a pint. There is no justification for spirits being taxed more heavily than beer.

“It also damages all the good work done to create fairer tax regimes overseas to provide a fairer playing field for Scotch whisky. It hinders the government’s ambitions for an export-led recovery.”

The Campaign for Real Ale (Camra) gathered more than 100,000 names on a petition which led to a parliamentary debate last year. It pointed out that beer duty has risen 42 per cent since 2008, adding 18 pubs a week are closing. Mr Osborne told MPs that 10,000 pubs have closed in the past decade.

Camra chief executive Mike Benner said: “This is a momentous day for beer drinkers, who will tonight be raising a glass to the Chancellor for axing this damaging tax escalator and helping keep pub-going affordable for hard-pressed consumers. This decision will keep the lid on the cost of a pint down the pub.

“Since the duty escalator was introduced in 2008, 5,800 pubs have been forced to call last orders for good. What could have been the final nail in the coffin for our pubs has been decisively avoided by the Chancellor in a move that will spark celebration in pubs across the UK.”