Tax inconsistency slammed by BBPA

Gordon Brown's latest penny-a-pint hike on the price of beer has been attacked by the British Beer & Pub Association (BBPA).​ Mark Hastings, the BBPA's communications director, said the Chancellor had missed an opportunity to create a long-term strategy for beer tax - and correct a long-standing tax distortion between beer and wine.

Duty on wine went up by four pence a bottle in today's Budget, while duty on spirits was frozen for the ninth successive year. Duty on cider, champagne and British sparkling wine was also frozen.

"The Chancellor's inconsistency is shown in his decision to freeze tax on spirits and cider," declared Mr Hastings. "It seems curious that the strongest alcoholic drinks, such as spirits and wine, have enjoyed consistently better tax treatment than beer, which has suffered a 22 per cent tax hike since 1997.

"Rather than the annual Budget merry-go-round, what business needs is a clear strategy for beer duty that delivers the stability we need for planning. Instability, uncertainty and pressures on the sector have cost 1,000 jobs in the brewing industry over the last 12 months."

Mr Hastings claimed the government's unequal treatment of beer and wine taxes was now costing the Treasury an estimated £200m a year. "Stronger beer is taxed more than weaker beer, but stronger wine is taxed the same as weaker wine," he said.

"Consequently, because wine has increased significantly in strength it is now taxed less relative to beer. All we are looking for is a level playing field and a tax regime that doesn't favour imported wine over British beer."

The Wine & Spirit Trade Association (WSTA) said it was delighted with freezes on spirits duty and sparkling wine - but questioned why duty on wine had been increased at a time when the market appeared to be slowing.