Drinks industry leaders meet Chancellor, Mandelson to discuss Budget
16.03.2009
The chairmen of the UK’s major drinks industry trade associations met with the Chancellor of the Exchequer and Business Secretary Lord Mandelson in two separate meetings today to discuss the upcoming Budget and the impact of tax rises and the economic slowdown on the sector.
The meetings come just weeks after the drinks industry warned in its first ever joint Budget submission that over 75,000 jobs are at risk if the Government proceeds with its current plan to further increase taxes on alcohol over the next four years.
In the meetings today, the drinks industry urged the Chancellor and Lord Mandelson to abandon the 2% above inflation tax escalator on alcohol due to start in April and called for no further increases in excise duty in this year’s Budget.
In asking for a duty freeze, industry leaders argued that it is essential now to help businesses across the whole sector cope with the most testing economic conditions. This will save jobs and help to sustain Treasury revenue that would be otherwise at risk as a result of falling alcohol sales.
Research by Oxford Economics included in the industry’s Budget submission examined the effects of last year’s 17% leap in excise duty and the implications of the four year tax escalator scheduled to start this year.
Its impact study forecasts:
• A further 75,000 jobs at risk in the drinks industry
• A drop in alcohol sales by over 11%
• Consumer prices up 17%
• Tax revenue from alcohol £1.6 billion lower than original Treasury estimates
A spokesman for the five trade associations said: “We appreciate the opportunity to make our case directly to the Chancellor and Lord Mandelson and hope that they will take a close look at the potential impact on employment of any further tax increases.
”The Government has a real opportunity next month to reverse its planned tax increases on the drinks industry to protect jobs and Treasury revenue.”
Notes to Editor
Attached is a photo of the Five Trade Association Chairmen leaving the Treasury today.
In March 2008 the Chancellor announced a 9% increase in alcohol duty and his intention to introduce a 4 year tax escalator, increasing duty rates by 2% above the rate of inflation from the time of the 2009 Budget.
In November 2008 the Chancellor announced an 8% increase in alcohol duty (4% for spirits) - designed to offset a temporary reduction in VAT - which will remain in place once VAT returns to its standard rate in January 2010.
The Trade Association Chairmen at today’s meeting with the Chancellor:
British Beer and Pub Association: Michael Turner
Gin and Vodka Association: Ian Jamieson
National Association of Cider Makers: Fenella Tyler
Scotch Whisky Association: Paul Walsh
Wine and Spirit Trade Association: Christopher Carson
For further information:
British Beer and Pub Association Mark Hastings Tel: +44 (0) 20 7627 9151
Gin and Vodka Association Edwin Atkinson Tel: +44 (0) 1722 415892
National Association of Cider Makers Bob Price Tel: +44 (0) 7767 757758
Scotch Whisky Association Campbell Evans Tel: +44 (0) 131 222 9231
Wine and Spirit Trade Association Jeremy Beadles Tel: +44 (0) 20 7089 3878
For further information contact:
Mark Hastings
Director of Communications
mhastings@beerandpub.com
Tel: 020 7627 9151 / 07884 181794