ALMR urged the Government to adopt an “innovative alcohol duty system” in its response to HM Treasury’s consultation on alcohol duty structures, which closed on 12 June 2017.
ALMR chief executive Kate Nicholls said introducing new bands for lower-strength wines, ciders and perries could reduce costs for both producers and retailers and “help stimulate demand” for high-quality on-trade drinks.
Promote pub drinking
“The ALMR has evidence to show that lower-strength products are predominantly consumed in the supervised environment of a pub or restaurant, and that if the Government is serious about promoting healthier attitudes towards alcohol, a tactic would be to promote responsible and supervised consumption within our venues”.
She also said “Brexit provides the opportunity for a more creative look at the duty regime to further incentivise innovation”.
The Treasury has been consulting on new duty bands for cider, perry and still wine to identify incentives that would encourage the production and consumption of lower-strength products.
The ALMR said reforming alcohol duty would help achieve this and, in turn, this would provide greater choice for customers.
Future duty innovation
The ALMR highlighted future opportunities to reform the duty system, either through a revision of the current EU directive or post-Brexit. This could include differential duty rates, allowing lower duty to be charged on drinks sold through the on-trade.
To encourage the production and consumption of low-strength beer, the Government introduced an additional duty on high-strength beer in 2011 and lowered the duty rate on low-strength beer.
However, cider and wine duties must be banded according to segment. This means that any drinks within a band pays the same duty regardless of alcoholic strength. Therefore, a pint of 1.3% alcohol by volume (ABV) of still cider currently draws the same amount of alcohol duty as a pint of 7.5% ABV cider.
The Government intends to examine options to amend the structure of the alcohol duty system so that duty rates better correspond to alcoholic strength.
Beer not included
In March, the British Beer and Pub Association (BBPA) hit out at the Government’s consultation on low-strength alcohol because beer was not included.
At the time, BBPA chief executive Brigid Simmonds said beer was “by far” the leading lower-strength drink, and lower duty rates have “spurred innovation and offered more choice for consumers in the sector".
She added that the BBPA would like the treasury to look closely at how the system could be improved, and suggested that by raising the 2.8% ABV threshold, it could bring more beers into the lower rate and could “boost lower-strength choices for consumers”.