Budget: drinks trade welcomes alcohol duty freeze but calls for fairer system

Wet-led hospitality businesses were disappointed by yesterday’s Budget, which extended the VAT cut for food and accommodation but failed to include alcoholic beverages, with drinks suppliers Molson Coors and Diageo saying more can still be done.

Phil Whitehead, managing director for Western Europe at Molson Coors Beverage Company, commented: “The extension of the furlough scheme, additional grants, business rates relief and 5% VAT rate are a vital lifeline for the beer and pub sector, with many pubs being unable to open viably until after 21 June.

“A beer duty freeze also provides welcome short-term support. However, when we are finally able to enjoy a pint with friends in our favourite local, we will still be suffering the impact of a beer duty, which is 11 times higher than in Spain and Germany and three times the EU average.

“Introducing an Alcohol Duty system that levels the playing field for British brewers as part of the Alcohol Duty Review, as well as long-term reform of the business rates system, is an essential part of the longer-term structural support needed to give business owners, including brewers and pub operators of all sizes, the confidence and stability to invest for the future.

“We are grateful for the short-term support to bridge the gap to reopening, but we will need this longer-term structural change to rebuild, grow and help drive the UK’s social and economic recovery. Pubs are at the heart of our communities, and integral to the fabric of the UK. With the right backing our sector can be an important part of the solution, supporting thousands of jobs and acting as a catalyst for growth in towns, high streets and city centres in every part of the country.”

Dayalan Nayager, managing director, Diageo Great Britain, added: “We thank the chancellor for providing much-needed stability by freezing alcohol duty. The last year has been incredibly tough and today’s decision, along with other measures to help the trade, gives the industry confidence to meet the ongoing challenges in these critical last months before reopening.

"Commitments such as Diageo’s £30m to help pubs and bars operate safely through our Raising the Bar [campaign] will give even further assurance. We now look ahead to the Alcohol Duty Review and welcome the opportunity to work with government to bring greater fairness to the duty system and spirits producers across the UK.”

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