U.K. Cuts Tax on Beer, Continues Scheduled Rise for Wine

U.K. Chancellor of the Exchequer George Osborne cut the price of a pint of beer by 1 penny, canceling a scheduled increase of 3 pence in a bid to support the country’s pubs.

The reduction, which will take effect on March 25, follows a campaign by the brewing and hospitality industry to help save pubs, 10,000 of which have closed in the past decade, Osborne said. Beer-duty rates will in future be increased in line with the retail-price index measure of inflation. Today’s cut refers to “average-strength” beer, the Treasury said.

“Responsible drinkers, and our pubs, should not pay the price for the problems caused by others,” Osborne told lawmakers in the House of Commons in London today. “Instead of the 3 pence rise in beer duty tax planned for this year I am canceling it altogether, that’s the freeze people have been campaigning for, but I’m going to go one step further and I am going to cut beer duty.”

Other alcohol-duty increases will continue as scheduled, Osborne said, with rates for wine, cider and spirits increasing by 2 percent more than RPI on March 25, as announced in Osborne’s 2010 budget.

A liter (33.8 fluid ounces) of cider will increase by 2 pence, a standard 75-centiliter bottle of wine by 10 pence and a bottle of spirits by 38 pence from March 25, according to Treasury briefing documents.

‘Momentous Day’

“This is a momentous day for Britain’s beer drinkers,” Mike Benner, chief executive of the Campaign for Real Ale, said in a statement on the pressure group’s website. “This is a massive vote of confidence in British pubs and will lead to an increase in pub going and more money in the chancellor’s coffers.”

Wine and spirit producers questioned the legality of singling out beer for a cut and said sales of their products also contribute to the survival of pubs. “It makes little sense to single out beer, particularly as there is a legal precedent to suggest government is unable to do so,” Miles Beale, chief executive officer of the Wine and Spirit Trade Association, said in a statement. “If this was designed as a measure to support pubs it seems misplaced. Over 41 percent of drinks sold in pubs are wine and spirits.”

-- Editors: Eddie Buckle, James Hertling

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