Beer tax hikes could put 60,000 jobs at risk

Up to 60,000 jobs will be lost across the beer and pub industry over the next five years if planned beer tax increases go ahead in the Budget on April 22, the British Beer & Pub Association (BBPA) warned today.

In a report, People, pubs and Parliament: A new deal for Britain's beer and pub sector, the BBPA describes the current economic climate as among "the toughest trading conditions in living memory".

It calls on the Chancellor to rethink plans set out 12 months ago to impose a "punitive" tax escalator (2% above inflation for the next four years).

The report outlines the "severe and sustained" pressures facing an industry that employs 600,000 people and supports a further 550,000 jobs in the UK, generating an estimated £28b in economic activity.

Key statistics include:

• 59,000 jobs are projected to be lost over the next five years (source: Oxford Economics)
• Total beer sales are down 9 million pints a day since 1979. Beer sales in pubs are now at their lowest level since the Great Depression of the 1930s (source: BBPA)
• Beer duty was increased twice during 2008 by a total of 18%

David Long, interim chief executive of the BBPA, said: "Last year, the chancellor increased beer tax by 18% and also set out plans to impose a duty escalator of above-inflation taxes in each of the next four years. His justification was that duty should rise in line with rising incomes.

"Twelve months on from the last Budget the economic situation has changed radically. While average earnings were rising by almost 5% in March last year, today they are actually falling. The chancellor must now think again."

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By Daniel Thomas

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