Page last updated at 05:05 GMT, Thursday, 13 March 2008

Drink duty 'spells doom' for pubs

Man drinking pint
Gloom at the inn as beer prices are raised in the Budget

The brewing industry is warning of more pub closures after tax changes that will add 4p to the price of a pint.

The British Beer and Pub Association said beer prices were already rising sharply because of the soaring cost of hops and barley.

The Campaign for Real Ale (CAMRA) said the tax rise will do nothing to stop binge-drinking by teenagers.

It warned the move will deprive the Treasury of extra tax by encouraging booze cruises and alcohol smuggling.

Drinkers 'punished'

The BBC's business correspondent, Nils Blythe, says that widespread concern about binge-drinking may have been behind the Budget's 6% increase in alcohol duty.

It's a great big nail whacked ruthlessly into the coffin of the British pub
Mike Benner
CAMRA chief executive

That is expected to push up the cost of an average pint from 2.50 to 2.70 by the end of the year.

But, in addition to Wednesday's rise, Chancellor Alistair Darling announced that alcohol duty would increase by 2% above inflation each year for the next four years.

The British Beer and Pub Association (BBPA) accused the government of punishing all beer drinkers rather than tackling the minority of drunken hooligans.

BBPA chief executive Rob Hayward said: "Every single day, the Treasury is losing over 1m in beer taxes and four pubs are closing.

"People are now drinking one million fewer pints a day compared with last year. That trend will continue," he said.

Paying for a pint
The beer lobby says higher prices spell doom for British pubs

"It's a decision doomed to failure - bad for taxpayers, beer, pubs and bad for the Treasury as well."

The Campaign for Real Ale said: "This budget will do nothing to stop binge drinking, but it will lead to pub closures on a huge scale, widen the gap between supermarket and pub prices and encourage smuggling and cross-border shopping."

CAMRA chief executive Mike Benner called it "a great big nail whacked ruthlessly into the coffin of the British pub".

Even without the higher duty, the BBPA had forecast that beer prices would have risen by 7% this year due to the higher cost of raw materials.

Drink 'affordable'

By contrast, medical experts welcomed the higher alcohol duty.

Professor Ian Gilmore, president of the Royal College of Physicians and chairman of the UK Alcohol Health Alliance, said the evidence suggested even moderately higher taxation would reduce alcohol-related deaths.

"Alcohol is now 65% more affordable than it was in 1980, and we need to reverse this trend," he said.

"The impact of an increase in duty on alcohol will be effective only if combined with strong government action to prevent irresponsible discounting and promotions by the retail industry."

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