Europe South Asia Asia Pacific Americas Middle East Africa BBC Homepage World Service Education

Front Page



UK Politics







Talking Point
On Air
Low Graphics

Friday, February 12, 1999 Published at 12:08 GMT

Business: The Economy

Beer battle lost

UK beer drinkers are paying 32 pence tax per pint

High taxes on UK beer are set to stay after independent brewers Shepherd Neame lost a court case against the government.

The brewer, one of the UK's oldest, had complained about the government's decision to increase beer duties yet again, saying this was a breach of European Union rules on tax harmonisation.

The three Court of Appeal judges said they were "sympathetic" to the brewery and others fighting for lower beer prices, but said there was "no legal obligation on the UK to abstain" from raising the tax on beer.

Fighting on

However Shepherd Neame has vowed to fight on. It will now appeal in the House of Lords, after the court refused to refer the matter to the European Court of Justice.

[ image: Discount ware houses in France pile beer high and sell it cheap]
Discount ware houses in France pile beer high and sell it cheap
Jonathan Neame, one of the company's directors, said: "We are obviously disappointed but the judgement was favourable to us in many ways. This may be just the loss of one battle in a long war to remove unfair taxes."

Shepherd Neame and other independent brewers had argued that high beer taxes in the UK were driving them out of business, because more and more people were importing large amounts of cheap beer from France.

Flood of imports

Beer sold in the UK carries taxes eight times higher than those in France - 32 pence a pint compared to 4p. As a result, thousands of Britons cross the Channel for a day trip to France, where they stock up on beer, wine and other cheap goods.

However, the sharp price difference on alcoholic drinks has attracted smugglers as well. According to some estimates, up to 75% of the beer that crossed the Channel in 1998 was smuggled for illegal resale.

[ image: It's cheaper to fill the glass on the continent]
It's cheaper to fill the glass on the continent
Shepherd Neame blames the flood of cheap beer for the closure of 50 of its pubs since 1993. The company believes that one in three pints of beer drunk in Kent are now coming from across the Channel.

Barbara Roche, financial secretary at HM Customs and Excise, said the decision upheld "the important principle that Parliament can legitimately set excise duties in the UK, subject to minimum rates agreed with our EU partners".

European Union law obliges all member countries to strive for tax harmonisation. The EU target rate for tax on alcoholic products is currently 3.74 euros per hectolitre per 1% of alcohol. This is equivalent to 7.6p per pint.

Most EU countries tax beer near this rate, while the UK increased the duty on beer by 3% in July 1997.

Shepherd Neame began its court action in 1997 and has spent an estimated total of £300,00 in legal costs so far.

Advanced options | Search tips

Back to top | BBC News Home | BBC Homepage | ©

The Economy Contents

Relevant Stories

25 Jan 99 | The Economy
Bitter battle escalates

In this section

Inquiry into energy provider loyalty

Brown considers IMF job

Chinese imports boost US trade gap

No longer Liffe as we know it

The growing threat of internet fraud

House passes US budget

Online share dealing triples

Rate fears as sales soar

Brown's bulging war-chest

Oil reaches nine-year high

UK unemployment falls again

Trade talks deadlocked

US inflation still subdued

Insolvent firms to get breathing space

Bank considered bigger rate rise

UK pay rising 'too fast'

Utilities face tough regulation

CBI's new chief named

US stocks hit highs after rate rise

US Fed raises rates

UK inflation creeps up

Row over the national shopping basket

Military airspace to be cut

TUC warns against following US

World growth accelerates

Union merger put in doubt

Japan's tentative economic recovery

EU fraud costs millions

CBI choice 'could wreck industrial relations'

WTO hails China deal

US business eyes Chinese market

Red tape task force

Websites and widgets

Guru predicts web surge

Malaysia's economy: The Sinatra Principle

Shell secures Iranian oil deal

Irish boom draws the Welsh

China deal to boost economy

US dream scenario continues

Japan's billion dollar spending spree