A Taxing Catastrophe

Not drunk is he who from the floor can rise again and drink some more.

- Old English field sobriety test

The above test should give you some flavor of the central place beer and pubs have occupied in Britain's history. British Bitters and Ales are famous world-wide. And there are a few British Porters that I could live on. For beer lovers across the world, the UK's corner pubs are temples and the wonderful craft brews they dispense are holy water. And now we learn that the pubs are in trouble and beer is fading across the pond, caused in large measure by the tax laws of the Labour government. This today from the Guardian:

Shakespeare may have declared "a quart of ale is a dish for a king", but five centuries on, Britain appears to have slaked its thirst for the humble beer.

Sales of a drink that, for many, is the cornerstone of British social life, have dropped to their lowest level since the 1930s, according to figures released today.

The British Beer and Pub Association (BBPA), which represents the brewing and pub industry, revealed that 14m fewer pints daily are being sold in pubs today - a slump of 49% since the peak in 1979.

Part of the long-term trend has been the move towards drinking at home. . .

. . . The BBPA, whose members account for almost all the beer brewed in the UK, says the situation is exacerbated by rising production costs as the prices of barley, malt, glass, aluminium and energy increase.

It also feels that the Treasury is picking on pints. Since 1997, beer duty has risen by 27% while consumption has fallen by 11%. Wine duty, meanwhile, has increased by just 16%, while wine-drinking has gone up by 46%. It's a similar story with spirits: although consumption has risen by 20% over the last decade, duty has increased by only 3%.

Rob Hayward, the chief executive of the BBPA, wants the government to help the brewing industry by reducing the tax burden. "We believe the benefits that have been enjoyed by other drinks from a tax freeze should be extended to Britain's national drink - beer," he said.

"The time to support our national drink is long overdue. We are calling for government policy to encourage and support Britain's businesses."

Mr Hayward added that although British beer had an impressive international reputation, the people who make it were being hamstrung by a tax policy that was "eroding the foundations of our business".

"We need a tax freeze and that is what we are calling on the chancellor to deliver," he said.

Major British brewers saw their profits tumble by 78% between 2004 and 2006. The BBPA says they are being further hobbled by the Treasury's insatiable coffers. It estimates that beer companies make only 0.7 pence profit per pint while paying the chancellor 33p a pint. Last week, two major brewers - Scottish & Newcastle UK and Carlsberg - warned pubs that rising costs and a poor summer meant that big rises in wholesale beer prices were likely.

A senior executive at S&NUK told the pub trade paper the Morning Advertiser that prices would probably increase "way above the rate of inflation" during the first part of next year. He said that rising cereal, crude oil and aluminium prices meant that brewers would be forced to charge more to recoup their losses.

Beer is not only falling victim to the growing fondness for wine among Britons. Its popularity is also suffering because of a cultural shift: the increasing taste for drinking at home. In 2005, 60% of all the wine sold in the UK was bought in supermarkets. And the wine and champagne market, which is now worth more than £10.2bn, increased by 26% between 2002 and 2006. Over the same period, sales of spirits and liqueurs went up by 16%.

. . . But he added: "Camra completely backs demands for a freeze in excise duty on beer, and would go further in calling for a reduction in the level of tax on Britain's national drink in order to bring people back to the pub."

Mr Morris said a reduction in duty would also counter the threat posed by the supermarkets, which use cheap beer as a loss leader.

"It is no coincidence that Britain has the highest level of excise duty in the EU and sales in the on-trade are falling, and yet binge-drinking is on the increase as supermarkets cynically exploit the consumer by offering cut-price booze to drink at home," he said. . . .

Read the whole article. You have to hate the left and their tax policies. Is there nothing then can't screw up? All I can say is "God save the Queen . . . and her wonderful pubs."