United Kingdom: If VAT is increased to 20%, price of beer in pubs will raise by 6p - report

An increase of VAT to 20% could increase the price of beer by 6p a pint in pubs causing the loss of more than 7,000 jobs a year, Eat Out Magazine cited on June, 15 an independent research by Oxford Economics.

The report forms part of a budget submission to the Chancellor by the British Beer and Pub Association, the Campaign for Real Ale and the Society of Independent Brewers. This is the first time the three organisations, representing all parts of the sector – brewing, pubs and consumers – have joined forces in this way.

The submission calls on the Chancellor to freeze duty for a sustained period to support community pubs and to set out plans for a fairer tax system that recognises beer's status as a lower strength British-produced drink.

If, however, VAT is increased to 20% then the three associations call for a compensatory cut in duty rates of 4% to ensure that beer in pubs was not taxed more.

16 June, 2010