Tax hike sparks trade concern

A planned hike in alcohol duty – the second such rise in less than 12 months – has been condemned by the trade here as “unsustainable”.

Chancellor Philip Hammond has indicated that he intends to raise drink duty in line with inflation in his November Budget, adding an extra two pence to the cost of a pint of beer.

The move continues a trend set by the chancellor in March this year when he ended the duty freeze on alcohol and re-introduced inflation-related rises for beer, cider, wine and spirits.

At that time, both the British Beer and Pub Association and the Wine and Spirit Trade Association were quick to condemn the decision, calling on the chancellor to encourage growth in the industry by cutting duty rates.

Here in Northern Ireland – where £1 in every £3 spent in a pub already goes to the government – trade body Hospitality Ulster (HU) has condemned plans for a further tax increase:

“This would be the second rise in less than 12 months and would undo all of the modest cuts that came in recent years in a bid to cut the extremely high tax on beer,” HU chief, Colin Neill, told LCN.

“With more than 1000 pub closures in Northern Ireland since the 1970s, it’s worth noting that while our hospitality industry sustains over 60,000 jobs, more than 45,000 of these are in food and drink and our pubs remain a major part of our tourism offer.”

Beer accounts for 60 per cent of pub sales in Northern Ireland and between 2008 and 2013 here, duty has been increased by a hefty 42 per cent. Throughout that time, beer sales in pubs here have fallen by 24 per cent.

Colin Neill’s sentiments were echoed by prominent hotelier, Bill Wolsey, who warned that rising costs would have to be passed on to customers:

“This is the old faithful area that the government always goes back to when it wants to raise money,” he told LCN. “At a time when, I believe, we are moving into a recessionary period, it’s crazy to do this to an industry that supports so many jobs.”

Warning that recession would inevitably lead to job losses, Mr Wolsey added:

“I do think it’s unrealistic to ask for tax to be cut in a period when finances are tight, but I also feel that it’s foolish to raise taxes at this time. There needs to be a period of breathing space for the industry.”

Veteran Belfast publican, Stephen Magorrian says that the rise “certainly won’t help”. Predicting that the average cost of a pint in Belfast would soon top £4, he added:

“The last thing we need to see are tax rises.

“I think the Chancellor should be trying to help the industry,” he added. “With all the uncertainty about at the minute over Brexit, he should be trying to reassure business. We’ve already seen rising costs in food and wine and this just adds to all of that.”

And Jack O’Hare of O’Hare’s Lounge Bars in Newcastle said that while the increase was “not particularly good” for the trade, he felt that the issues he and his colleagues currently face in NI go well beyond a tax hike:

“I wouldn’t mind paying these taxes if everything else was sorted out,” he added. “If we were able to open at Easter, if we could open after 1am on a Sunday morning and keep pace with the guys in the south, this is what we need to see…It’s time that we moved on here in North