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Osborne brings some cheer to Britain's drinks industry
March 19, 2014 / 4:26 PM / 4 years ago

Osborne brings some cheer to Britain's drinks industry

LONDON, March 19 (Reuters) - Britain’s finance minister George Osborne raised some cheer for the drinks industry on Wednesday, announcing he would cut beer duty by one pence a pint whilst freezing duty on spirits and cider.

In his annual budget statement, Osborne said in addition he would scrap the duty escalator for all alcohol, which added two percent plus inflation to prices each year, meaning wine would now rise with inflation.

With Scotland’s independence referendum moving closer, Osborne hailed Scottish whisky a “huge British success story”. The Scotch Whisky industry is worth around 4 billion pounds to the Scottish economy, where it employs more than 10,000 people according to government figures.

Osborne said the decision to freeze duty on cider was made to help cider makers in England’s west country that have been hit hard by recent flooding.

Britain’s Diageo, the world’s biggest spirits company, said the tax changes were a huge boost to the market and would help sales at home and abroad.

Beer duty was also cut by 1p for the second year running.

The British Beer and Pub Association, representing an industry suffering from 28 pub closures a week, said the move would help protect over 7,000 jobs in the next two years, as firms battle squeezed consumer spending and competition from supermarkets.

“Overall I‘m pleased, it’s a much better budget than we’ve had in the last decade for pubs,” Tim Martin, the founder and Chairman of JD Wetherspoon, told Reuters.

“He’s (Osborne) realised it’s a very heavily taxed industry and he is making a nod towards that, which is very good.”

As well as a 1p cut in duty last year the beer duty escalator was also scrapped in 2013, after a 42 percent rise in beer tax over five years.

Shares in Wetherspoon were up 1 percent to 849 pence at 1450 GMT. British rivals Marston’s were up 0.3 percent to 147.5p, while Greene King was down 0.4 percent to 913p. (Reporting by Neil Maidment; Editing by Elaine Hardcastle)

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