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“Tax alcohol at a higher rate than drink sold in pubs” – SMF

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“Tax alcohol at a higher rate than drink sold in pubs” – SMF 8th September 2019

The Social Market Foundation has recommended to support the pub sector and cut problem drinking.

The study commissioned by the Institute of Alcohol Studies concluded that a "pub relief" would make drinking at home less affordable and support the pub sector.

The report’s idea would be to shift taxation towards high-strength drinks bought for consumption at home - and away from weaker products bought in pubs and bars.

According to reports that could mean that beer in pubs would become less expensive, depending on how the duties were structured.

Taxing cider and wine by the unit, as is already the case with beer and spirits, would also help cut down problem drinking, it added.

According to recent research, cheap supermarket alcohol was the "number one" concern for publicans, said IAS senior policy analyst Aveek Bhattacharya, followed by competition from big chains.

Mr Bhattacharya said alcohol in supermarkets is cheap for a number of reasons.

Alcohol duty has been cut in real terms every year since 2013, and beer duty in real terms is 18% lower than then.

One of the main reasons supermarket booze is cheaper than pubs is bargaining power, he says.

Supermarkets can squeeze brewers on price because they are such large customers, but when it comes to landlords negotiating with brewers, "the boot's on the other foot", he said.

Supermarkets can also use alcohol as a loss leader - that is, it's sold at a loss to attract shoppers into stores, where they will buy more profitable items.

Source: BBC

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