LETTERs
Beware a rise in excise duty
My recent remarks in the Morning Advertiser (15 November 2007) about the warnings from the brewing sector that beer prices will have to rise because of increased costs of malting barley and hops have caused a bit of a stir.
While it is true that, for brewers, the price of a pint will have to go up to cover the increased costs of malted barley and hops, that is only a small part of a much larger picture.
The poor summer means that the price of malting barley has risen by between 50% and 80%. Hop prices have also risen. While these raw material costs only represent a few pence per pint, such a large percentage price rise will have some impact on the wholesale price of beer charged to the trade and, hence to the pub customer.
But there are also a host of other costs, such as wages, electricity, aluminium and glass, that add to the burden on all brewers. Of course, brewers can safeguard themselves to a certain extent by contracting forward with farmers for malting barley and hops.
This not only helps hedge against sudden price rises but guarantees top-quality ingredients. And no one should begrudge farmers an increase in the price they get for top-quality malting barley after years of negligible price rises.
It is, therefore, essential that next March brewers, and hence licensees and pub customers, are not hit by another price rise through an increase in excise duty on beer.
The UK already has the highest rate of excise duty for beer in the EU. An excise duty rise, even one of only 1p, will impact hardest on pubs already suffering from rent, rate and energy rises.
Supermarkets which,
as everyone, even the Competition Commission, acknowledges are selling beer at below cost, will not suffer from an excise duty rise. They have thousands
of other lines and can use alcohol as a loss leader; pubs, whose main income stream is beer sales, are not so fortunate.
Iain R Loe
Camra research & information manager
New law is key to survival of pubs
I write with reference to your story about a lobby group being set up with the aim of increasing tax on alcohol by 10% (MA, 25 October 2007).
You report that "research from across the world shows a direct link between affordability of alcohol and level of consumption". Also that "price is a key way in which you can reduce overall levels of alcohol harm". So who's the biggest culprit in the UK? The question is a no-brainer really - it's the supermarkets.
Isn't it about time there was legislation to:
1. Prevent (supermarkets) selling alcohol at below-cost price (as happened during the World Cup);
2. Ensure off-trade retailing does not indulge ridiculously-discounted price promotions.
This is an opportunity for the on-trade to champion its professionalism and make sure that Government sees it as being on their side.
David R Jones
David R Jones & Co,
Financial accountants, Wetherby, West Yorks
Time to strike at the supermarkets
I write in response to your article on supermarket alcohol price wars (MA,
15 November 2007).
Where is it all going to end? There's economics and there's plain stupidity.
We've now crossed the boundary and it's very dangerous.
If the kind of outlandish pricing described continues, the whole licensed trade is in danger - especially the on-licensed trade. Just look at the number of pubs and clubs already closing down.
The trade really needs to attack the supermarkets in a concerted manner, because the Government and its commissions are obviously spineless wimps.
The big pubcos must start threatening the big four brewers that they'll dump their products if they continue appearing at silly prices in supermarkets near their pubs.
Also, more pubcos need to get on board our company's Stuff the Supermarkets campaign and be pro-active.
There's no point in the pubcos worrying about the price of grain if all their customers are sitting in front of their own TVs, getting blathered for £1.50.
Come on, licensed trade - get off your backsides and attack the supermarkets and the big four brewers.
Tony Brookes
Head of Steam, Hexham, Northumberland
