Taxes hit UK beer sales

Rising taxes have been blamed for a near-10% fall in UK beer sales in the second quarter of 2011.

The January VAT rise followed by a 7.2% increase in beer duty in the latest Budget negated any boom in sales which resulted from the royal wedding as the depressing Q2 figures contributed to a 7.1% decline in sales in the year to June.

The figures are revealed in the British Beer and Pub Association’s (BBPA) latest UK Quarterly Beer Barometer – the industry survey of beer sales.

The survey shows that in the second quarter of 2011, beer sales fell by 9.8% with sales in supermarkets and shops down 15% and pub sales down 4.5%.

According to the Association, pub sales in April and May were boosted due to the royal wedding and a spate of bank holidays, but the cumulative impact of tax rises – equating to 10 pence per pint in pubs – in Q2 severely dampened any positive impact.

The BBPA also pointed out that this year’s comparator had been hit by the “World Cup effect” which boosted sales in both pubs and supermarkets in Q2 last year.

Brigid Simmonds, chief executive of the BBPA, said: “Beer sales are a barometer of Britain’s economic confidence. With last year’s sales figures benefiting from the World Cup effect, which has historically boosted sales, sustaining volumes was always a challenge.

“The royal wedding gave a welcome boost to this quarter’s beer sales, but beer tax rises are now hitting our brewers hard and undermining recovery.

“We warned the chancellor that further beer tax rises would hinder job growth in our sector. Duty increases are fuelling inflation and stifling investment.

“Taxing beer fairly would create thousands of new jobs and substantial extra tax revenues at a time when we are all looking for private-sector led recovery.”