Monday, 23 May 2016

Smallest decline in beer sales for years

According to the British Beer and Pub Association (BBPA), beer sales in the first quarter of 2016 showed the smallest decline (1%) since 2008, compared with the same quarter last year. Off-sales dropped more at 1.8%, than on-sales at 0.2%. For pubs, this is the smallest drop in the first quarter since 2002. The BBPA credit the three duty cuts followed by a duty freeze since 2013. In comparison, the notorious duty escalator increased tax on beer by 42% between 2008 and 2013, and the UK remains one of the most highly taxed beer markets in the EU.

As I see it, the danger is that if beer sales do stabilise, the government will begin to consider the industry can bear new tax increases, and there can be little doubt that fake charity, Alcohol Concern, will be pressing for this. I'm sceptical enough to think that the probable reason for the three cuts and the freeze in beer duty was because the government realised it was killing the cash cow. I hope I'm wrong in thinking that beer tax might be increased if our rulers decide pubs and beer sales can take it. We'll see, but in the meantime, this is better news than pubgoers have had for some time.

2 comments:

  1. The BBPA always tend to highlight the quarterly figures in these stats, whereas the year-on-year ones are more meaningful, as they smooth out short-term fluctuations. On this basis, over a year, on-trade consumption is down by 2.4%, whereas the off-trade is up by 1.3%. Compared with ten years ago, on-trade sales are down by 36%, whereas off-trade sales have fallen by only 2%.

    I think we were still some way off the point where increased duty actually started to bring in less absolute revenue, although IMV this has been passed with tobacco.

    I'd say the key reason for the four year small cuts/freeze was electoral calculation. It defuses a high-profile and potentially toxic issue, just as the ongoing fuel duty freeze has done. It's clever politics as there is no mileage whatsoever in Labour opposing it and callng for increases. I can see us returning to duty rising in line with inflation from next year, however.

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  2. Your last point: that wouldn't surprise me at all.

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