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BBPA Annual Dinner – BBPA Chairman Jonathan Neame highlights beer and pub trade “crushing” tax burden

18/10/12


In his speech to the BBPA Annual dinner last night, BBPA Chairman Jonathan Neame called for action on the brewing and pub industry’s “crushing” tax burden, as well as highlighting the industry’s achievements in the past year:


“When we pay 40 to 50 per cent of all revenues in excise duty and VAT, and Starbucks paying next to nothing - something is very wrong with our system,” he said.”


“This tax burden is despised by pubgoers, hated by beer drinkers, and is crushing for licensees. This is a tax on socialising, on communities, on friendship. It hits the poorest in our society hardest.”


Full speech follows:


Jonathan Neame, BBPA Chairman, Chief Executive of Shepherd Neame:


Welcome to the third Annual Dinner. 2012 has been a year to celebrate.


We are a responsible sector who want to pay our way. We too want the national deficit to reduce and the economy to recover but when


I am not just referring to the golden summer of the Olympic and Paralympic Games, but also to the signs of regeneration that our industry is enjoying and to the improving reputation for beer and pubs.


Of course it remains the case that beer consumption continues to decline and pubs continue to close and that we operate in a very challenging economic environment.


But, we should celebrate that Great British hospitality has been on show all summer, that the British pub has been trumpeted around the world in the Visit Britain Pubs are GreAt campaign. And that in spite of all the challenges the trade has gone through in the last five years communities still chose to centre their Diamond Jubilee celebrations around their local … a truly British celebration in spite of the typically British weather.


We should celebrate that:


  • Pubs are outperforming restaurants for food growth … we now serve one billion meals a year and offer excellent value for money.
  • This is an industry of 1 million people, half of whom are under 25 where jobs are most needed, working in 50,000 small family businesses.
  • We still lead the world in a variety of disciplines from malting barley production to aroma hops to brewing engineering to pub design to food service and logistics and much more.
  • This country now boasts 1,000 British breweries with more product choice for the beer drinker and more new product development and creativity than at any stage in 70 years. Clear evidence that if Government invests wealth is created.
  • Thanks to the work of brewers, Cask Marque, CAMRA, the Beer Academy and many others, the beer drinker is better informed than ever before.
  • For those that export, British beer is enjoying greater interest from overseas than ever before.

  • Furthermore thanks to the good work of your Association the reputation of the industry amongst policy makers is on the rise.

  • The importance of pubs to their community is now recognised across the political spectrum in a way that it was not five years ago. My thanks to our friends in Parliament for their support. Pubs are - rightly - seen as a place to socialise, to eat, to stay, for family occasion, for friendship … no longer male drinking dens of bad behaviour

  • We have faced up to the negative side of alcohol and shown what a responsible industry we are with our work on unit awareness, the promotion of beer as the low alcohol drink, our support for the 2.8% category, the 2/3rd pint glass measure and our positive engagement with police, local and licensing authorities through schemes like Business Improvement Districts; Best Bar None and Pubwatch. And now thankfully binge drinking is declining and anti-social behaviour reducing.

  • As manufacturers, brewers are increasingly recognised as leaders in reducing harm to the environment.

This reputational shift is achieved through the excellent and continued hard work of the team at the BBPA. The agenda is vast, the policy initiatives relentless and the demands for clarity of thought, good evidence base and clear communication never ending. They operate on tight budgets and short timescales. I think we all owe a huge debt of gratitude to my predecessor Chairmen, Ralph Findlay and Mark Hunter for their contribution and, in particular, to Brigid and the team for their achievements in the last year and for organising this evening.
Of course we do not always achieve everything we set out to or as fast as we could wish, but we have a desire to change and are changing for the better. Our pitch to Government is that we can deliver positive benefits for the wealth of the nation and for society faster by working together rather than through new legislation.


  • Take Fiscal Marks [plans for tax stamps on every can and bottle of beer]: we all want to stamp out fraud. We are willing to work with HMRC to support that effort but do not accept that legislation in the answer.
  • Take the Responsibility Deal we have led the way with the Billion Unit Reduction pledge.
  • Take the Code of Practice, we are now finalising version 6 and enjoy a positive engagement with ALMR and other bodies. This is held up as a model of self-regulation within BIS. Some would like us to go faster, but I say look how far we have already come. The mindset and attitude shift with pub owners is palpable : the race is on to add services and support to our partner licensees.

Is there more that we can do? Of course.


  • We must encourage the voice of the beer drinker and pub goer to be heard more loudly
  • We must work with our sister organisations to identify what unites us rather than what divides us.

But, for all the great work. for all the positive engagement with MPs and policymakers, for all the love and support of the great British public, there is still one barbican, one citadel that remains impenetrable and impermeable : HM Treasury.


We are a responsible sector who want to pay our way. We too want the national deficit to reduce and the economy to recover but when we pay 40-50% of all revenues in excise duty and VAT, and Starbucks paying next to nothing, something is very wrong with our system. This tax burden is despised by pubgoers, hated by beer drinkers, is crushing for licensees. This is a tax on socialising, on communities, on friendship. It hits the poorest in our society hardest.


We are a modern vibrant, much loved industry. We can create more jobs - 100,000s of jobs, young people jobs - we can create investment, local investment with local builders and local suppliers. We can help revive rural economies. We are a force for good in society. But we cannot do it with this unsustainable and increasing level of tax.


Our objectives as an organisation over the next three years are clear: to stop the duty escalator and to reduce the VAT burden for pubs


Our message to all participants in the industry is clear: we can achieve these aims if we all pull together to our goal. The e-petition is a wonderful example of what can be achieved, but it is only the first step in the road.


Our message to Government is clear. We already contribute £19 billion of economic activity and £11 billion of tax. Any Government that is serious about growth, and serious jobs, investment and social cohesion should see us as a priority partner to invest with not a cash cow.


We have changed as an industry. Time for Government and the Treasury to change too.


Enjoy the evening.


Notes to editors:

For further information please contact:


David Wilson, Director of Public Affairs: 020 7627 9151/ 07557 436 033
Gareth Barrett, Public Affairs Officer Tel: (020) 7627 9154


Notes to editors:


The British Beer & Pub Association is the UK’s leading organisation representing the brewing and pub sector. Its members account for 96 per cent of the beer brewed in the UK and around half of Britain’s 50,000 pubs.




For further information contact:

Neil Williams
Head of Media
nwilliams@beerandpub.com
Tel: 020 7627 9156 / 07974 249 779