Beer Duty / 11 January 2017

Budget 2017 – new report adds weight to BBPA’s call for cut in beer duty rate

  • Over 898,000 jobs supported by the beer and pub industry, 42 per cent of which are for under 25s
  • £23 billion contribution to the economy in Gross Value Added (GVA)
  • BBPA calls for further beer duty cut in the Budget, to support a vital industry, after securing three cuts in recent years

A new report by economic experts Oxford Economics (OE), commissioned by the British Beer & Pub Association (BBPA), has found that the beer and pub industry in Britain employs almost 900,000 people, and contributes £23.1 billion to the British economy. The BBPA says the figures make clear the case for a further beer duty cut in the Budget on 8th March, to protect jobs and investment in the sector.

The report demonstrates that the industry brings significant economic benefits to the national economy, with OE data showing that brewing alone sustains over 100,000 jobs. Nearly 800,000 jobs are supported by over 49,000 pubs across Britain.

Since the last OE report, commissioned by the BBPA in January 2015, the number of jobs supported by the sector has increased by 29,000, whilst capital investment in brewing and pubs has risen to £2 billion, up from £1.2 billion in the previous year.

The report also finds that this vital national industry pays an astonishing £12.6 billion in tax, making clear the case for further reductions in the UK’s very high rate of beer duty in the Budget.

The BBPA argues that a further duty cut would help encourage investment, protect jobs and improve confidence in the sector. As Britain prepares for the economic challenges of leaving the European Union, this is more important now than ever, says the BBPA, for a UK industry where 83 per cent of the beer consumed here, is brewed here.

Brigid Simmonds, BBPA Chief Executive, comments:

“Our sector supports almost 900,000 vital jobs, and it is particularly important that we can go on boosting employment, especially for younger people, which is why the BBPA is calling for a further cut in beer duty in the Budget.

“Three historic beer duty cuts since 2013 have brought huge benefits, created jobs and encouraged investment, but our rate of duty is still many times higher than that of our neighbouring countries. As we leave the European Union, we need a tax system that encourages investment more than ever before, and we will be working hard to encourage the Government to secure further reductions on 8th March.”

Adrian Cooper, Chief Executive Officer Oxford Economics, adds:

“Our analysis confirms that the UK beer and pub sector continues to be an important source of employment and output at a national and local level. Its activity generates a significant amount of tax contributions, investment and opportunities for young people to enter the labour market.”

Key facts

  • The beer and pub sector supports 898,000 jobs – 42 per cent are under 25s
  • 83 per cent of the beer sold in Britain is made in Britain
  • 1 job in brewing supports 1 job in agriculture and the wider supply chain, 1.5 jobs in retail, and 14 jobs in pubs and clubs.
  • Pubs rely on beer sales – seven in every ten pub drinks sold is beer.
  • Under the beer duty escalator (2008-2013) beer tax rose by 42 per cent. During this period, 7,000 pubs closed and 58,000 jobs were lost.
  • There are 21,000 more jobs than if the beer duty escalator had continued.
  • After years of above inflation tax rises, beer taxes are still too high. Britons pay 40 per cent of all EU beer duties, but drink just 12 per cent of the beer.
  • Beer price increases in pubs are at their lowest since the 1980s.
    The British Beer & Pub Association is the leading body representing Britain’s brewers and pub companies. The Association is more than a century old and was originally founded as the Brewers’ Society in 1904. Our members account for some 90 per cent of beer brewed in Britain today, and own around 20,000 of the nation’s pubs.

Further Reading