OTS p4-5 News Dec08.qxp 03/12/2008 13:18 Page 5
news
VAT cut, but pub trade hit with duty rise
Beer duty has been increased revealed empty property tax relief
again by Chancellor Alistair for building with a rateable value
Darling to offset the decrease in below £50,000 — which will
VAT announced late last month. benefit 70% of properties; £1bn
The 8% rise in duty ensures that will be available under the Small
publicans will not see the Business Finance Scheme, with
benefits many others sectors will “fairer terms than before”. Firms
as the Government attempts to can apply to borrow between
increase consumers spending, to £1,000 and £1m. Finally the
regenerate the faltering economy. Government has delayed the
In his pre-budget report, the increase in the rate of corporation
Chancellor announced VAT would tax for small companies – the
be cut by 2.5% to 15% for a 13 level will remain unchanged in
month period, although the rise 2009.
in duty means the pub trade Mr Darling has cut VAT but increased duty on beer. The Scotch whisky industry
doesn’t stand to benefit. Worse meanwhile breathed a sigh of
still, when VAT returns to its sector is yet again being singled have been useful,” he said. “A lot relief with the change of heart
normal level in January 2010 out with an alcohol duty rise to of licensees will be disappointed from Number 11. Chief executive
alcohol prices will rise again. off-set the cuts,” he said. “But the others are getting help and they of The Scotch Whisky Association,
However just one day after real poison pill is that the duty are not.” Gavin Hewitt, said: “We welcome
making this announcement the will be maintained after the VAT Paul Waterson, chief executive the Government’s quick and
Chancellor back-tracked and cut is restored in January 2010. of the SLTA, said the whole positive action to ensure that the
halved the duty increase on Despite all the representations economy, not just the pub trade, overall duty burden faced by
whisky from 8% to 4%, which he our industry has made to the faced trying times. “Short-termism Scotch Whisky in its home market
said would “hugely benefit the Government via our many in financial policy is never a good remains broadly unchanged as a
spirits industry”. channels, the Chancellor thing. What will happen down the result of this week’s Pre-Budget
This will not help pubs which continues to batter us.” line to pay for this is a worry for Report. This is a good signal to
rely on beer sales for the bulk of Patrick Browne, chief executive us all,” he said. “I don’t see our many overseas markets.”
their trade however and the duty of the SBPA said the news was anything in the budget that will As OTS went to press, the
increase was quickly damned by very disappointing for the trade. help small licensed businesses. BBPA was calling on the
the trade with BII chief executive “Any VAT benefit is being offset Duty increases should have been Chancellor to “urgently
John McNamara, calling it a by this duty increase so shelved, the Government really reconsider” the tax hike on beer.
‘poison pill’. “Here we go again! effectively there’s been no benefit have to aim to create a level “If the Government is now
I’m staggered that, while all other to the licensed trade. Pubs and playing field.” changing the rules for spirits, it
businesses are being given a drinks companies have struggled It wasn’t all bad news for the must change the rules for beer,”
boost by the lowering of the VAT in Scotland over the last few trade though. Elsewhere in the said BBPA chief executive Rob
rate to 15%, the licensed retail years and even slight relief would pre-budget speech, Mr Darling Hayward.
Tetley brewery set to close
Reckless promotions
Carlsberg has announced it is to close its Tetley Brewery in Leeds, with the possibility of up to 170 job
losses. The company has put the proposed closure down to current market conditions, however it has history claims Cox
been roundly criticised in many quarters of the trade, with CAMRA playing on the company’s
Irresponsible drinks promotions in
slogan, saying it was: “probably the worst decision in the world for real ale drinkers.”
Scotland’s pubs are now a thing
Nick Webb, supply chain director of Carlsberg UK, said: “We are announcing the closure proposal
of the past according to the
more than two years in advance so that our employees are able to prepare for the future. We have to
Scottish Government’s head of
consider difficult decisions to remain competitive in the current environment and we regret the risk to
licensing, Gary Cox. With the
the jobs of our employees. Although the business has remained robust in
trade now working its way
tough market conditions, this proposed move is vital to ensure Carlsberg
through the transition period,
UK remains a strong and sustainable business in the future.”
Gary said reckless promotions
Bob Stukins, CAMRA vice chairman and director of brewery
had “all but disappeared”.
campaigning said it remained unclear where Carlsberg UK intends to
Speaking at the Responsible
brew the famous Tetley beers. “Brewed outside their Leeds heartland I
Drinks Retailing Awards Gary
fear they would lack the provenance which today’s discerning consumers
called for pubs to sell soft drinks
expect. While we recognise the enormous challenges facing the brewing
for less than alcohol drinks at all
industry at present, I think this is a shortsighted decision. Recent statistics
times. He also admitted that if
clearly show that real ale is performing better than other beer styles in a CAMRA’s Bob Stukins
plans to introduce minimum
declining market. There is an opportunity to respond to this, invest in the
called the move
pricing are shown not to work,
Tetley brands and bring them back to glory.”
shortsighted.
then they will be dropped.
www.55north.com/ots_home.asp · december 2008 · ots · 5 ·
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