The beer duty escalator caused enormous damage to the beer and pub industry. Five years of above inflation tax rises led to declining beer sales, 7,000 pub closures, and 58,000 lost jobs. Staggering figures which demonstrate just how fundamental the beer industry is to the UK economy and how crippling excessive taxation can be.
That's why scrapping the duty escalator was so important. The two consecutive cuts to beer duty in the 2013 and 2014 budgets helped restore confidence in our industry and start a new era of investment in the great British pub. After years of decline we are now seeing a revival in beer. For the first time in ten years beer sales have increased and pubs are benefiting. Cutting duty has helped us plan for growth in the future. £1.1billion of investments will be made this year across the industry. This investment will create an additional 16,000 jobs in pubs, agriculture, brewing and the wider supply chain.
Heineken has played a part in this revival, investing £126million into our breweries, cider operations and pubs in the last year. Our investment is having a positive impact across the country, breathing life back in to pubs, securing jobs in our breweries and boosting the rural economy in areas such as Herefordshire, where our cider orchards are grown.
Despite this recent success, beer and cider are still hugely overtaxed. Beer duty is 37% higher than in 2008. UK consumers pay 40% of all the beer tax collected in Europe, but drink just 12% of the beer. That is clearly unfair for consumers and pubs remain under pressure as a result.
Anything other than a duty cut in this year's Budget would be a major step backwards and that is why we are calling for duty cuts for beer and cider in the Budget. The importance of this issue should be clear for all to see. Beer and pubs contribute £22billion to UK GDP, support almost 1 million jobs and generate £13billion in tax revenue.
This is an industry worth supporting and promoting. Any duty increases introduced by this Government, or the next, will damage the renewed energy, ambition and innovation we are now seeing across our industry, inhibiting job creation and reducing crucial investment.
A duty cut will encourage businesses like ours to continue to invest in UK beer, cider and pubs, securing a sustainable future for this great British industry. And, with 20million pints of beer enjoyed every day in Britain - it will help ensure that a hard-earned pint remains an affordable pleasure for millions of consumers around the country.
David Forde
UK Managing Director, Heineken UK