‘Cheap booze causes closures’
LANDLORDS: TAX SAVINGS ARE NOT BEING PASSED DOWN
Reporter THE government could lose out on £8 billion in tax revenue as a result of alcohol duty cuts aimed at saving pubs, which North East landlords say is having little impact on their business.
The policy began in 2012 under then-Chancellor George Osborne and were presented as a high profile measure to help struggling hostelries.
Analysis by the Institute of Alcohol Studies (IAS) following the 2017 Budget said alcohol duty had been cut in real terms for five of the previous six years.
It also said that accounting for inflation, beer duty was 16% lower than in 2012; cider and spirits duty 8% lower, and wine duty 2% lower.
Cumulatively, according to the IAS, these policies will cost the Treasury over £1 billion in 2018/19, and a total of £8.1 billion in the 10 years to 2023.
Yet the evidence that duty cuts benefited pubs is sketchy, as brewers have retained the savings and off-licenses have continued to undercut them, said the IAS.
And its conclusion has been backed up by results of a major survey of 200 of this region’s landlords in which a massive 89% of those asked said the policy had not helped their businesses , while only 7% said it had.
The majority of them said that cheap supermarket and off licence booze was the main reason why pubs are closing.
The survey was commissioned by Balance, the North East Alcohol Office, and carried out by independent researchers.
Director of Balance, Colin Shevills, said: “It seems alcohol tax cuts are not passed down to pubs or their locals, and landlords want a more even playing field with supermarkets.”
Meanwhile Professor Sir Ian Gilmore, a liver physician and chairman of the Alcohol Health Alliance, said: “At a time when our NHS is facing funding pressures and the Government has promised the NHS an extra £20.5 billion by 2023/24, the question is why we have seen several years of tax giveaways to the alcohol industry.”
The landlords taking part in the survey were asked for their views on why British pubs are under pressure, future prospects for their business, and what landlords think the Government could do to tackle alcohol harm while helping our pubs to flourish.
Responding to the question ‘What do you think are the main causes of pub closures?”, 51% cited cheap alcohol in both supermarkets and off licences as the main cause of pub closures.
Other reasons included increased overheads in rent and utilities (24%), customers staying at home and coming to the pub later (23%), high supplier costs (18%), inflation and squeezed incomes (18%), increased competition from other pubs (18%) and business rates (13%).
Three out of four landlords asked said increasing supermarket alcohol prices would help tackle alcohol harm while 64% said it was the best way the Government could support the pub trade.
Mr Shevills said: “Landlords are clearly feeling the impact of cheap supermarket and off licence alcohol, and they want something done about it.
“One of the patterns they have seen over recent years is fewer people coming out and more people pre-loading with cheap alcohol.”
Other findings were that around half of landlords support Minimum Unit Price for alcohol – a policy which would tackle the cheapest supermarket alcohol while leaving 99% of pub prices untouched.
A Treasury spokesperson said: “We recognise the social and economic value of local pubs, and that’s why 90% of pubs across the country can benefit from the business rates relief introduced at Budget 2017, saving them up to £1,000 a year.”