Taxes blamed for beer sales slump as drinkers abandon pubs

Taxes have been blamed for a beer sales slump Photo: Johnny Green/PA Wire

Beer sales have slumped as people turn away from the pub because of the downturn.

The Government was today accused of damaging the brewing industry after new figures showed another fall in beer sales in pubs and supermarkets.

The British Beer & Pub Association (BBPA) blamed taxes for the 5.6% reduction in the past three months, and said there was now an urgent need to freeze the beer duty escalator.

Around 117 million fewer pints were drunk in the quarter to September compared with the same period a year ago, despite the benefits of the Olympics and Euro 2012 football championship, said the association.

If the Government wants to encourage growth, back British business and support local communities, then it must end the beer duty escalator.

The Chancellor must listen to the thousands of people now calling for a change, so the sector can grow, create jobs and contribute more to UK plc.

– Brigid Simmonds, chief executive of the BBPA

Beer prices have been affected by an "astonishing" 42% tax hike since the 2%-above inflation escalator was introduced in 2008, said the report.

MPs will today call for a full Parliamentary debate on the impact of beer taxes, following a petition signed by over 100,000 people which demanded Government action on the issue.

Punters are being turned away from pubs because of the downturn Credit: Yui Mok/PA Wire

Sales of beer in pubs fell by 4.8% in the latest quarter, with 51 million fewer pints poured for pubgoers than in the same period in 2011, while supermarkets and off-license sales were down by 6.5%.

The Government's controversial beer tax "escalator" policy means increases of 2% above inflation until 2014/15.

The Government hugely values the economic contribution made by pubs and breweries. We have introduced a range of tax measures that will help the alcohol industry, and pubs in particular.

Cutting employers' national insurance contributions will make it cheaper for pubs to employ people on incomes of less than £21,000. The industry will also benefit from the reductions in corporation tax, fuel duty cut and extension of the small business rates relief holiday. Small beer producers are also benefiting from the small breweries relief.

However, at a time when we are working hard to get down the deficit, alcohol duty revenues do make an important contribution to the public finances. Crucially, the Government has not made any changes beyond what was announced at the budget in 2008.

– A Treasury spokesman