Drinks industry happy with Budget, tobacco firms less so

The drinks industry has welcomed the Chancellor’s decision in his Budget last week to freeze or lower duty on cider, beer and certain spirits, with the scrapping of the duty escalator coming in for particular praise.

David Forde, UK managing director at Heineken, said: “The Chancellor’s announcement on cider and beer duty will be cheered at breweries, retailers, wholesalers, pubs, bars and living rooms across the UK. By freezing cider duty and again reducing beer duty – he sends a clear message that brewing, cider making and the great British pub are important to the UK’s economy.”

Gordon Johncox, MD of cider maker Aston Manor, said: “This common sense decision sustains our confidence that we can deliver further growth in the business with the ambitious investment plans we have – plans that have already transformed Aston Manor Cider in the last few years.

“Our investment cycle is measured in decades, hence we have a critical need for stability on duty and policy and we hope this decision signals a period of sustained support from Government for a great British success story, and Aston Manor wants to play a full part in that.”

Paul Bartlett, chairman of the National Association of Cider Makers (NACM), concurred. : “It is great news that the Chancellor has abandoned the duty escalator and frozen duty on cider this year in recognition of the important role that cider makers play in their local, rural communities as well as the impact on growers and cider makers from the winter storms and rain,” he said.

“Responsible drinkers will be able to enjoy British cider as the cycle of continual above inflation increases is now broken. This decision will be celebrated by nearly 500 producers across the country as it protects the investment they have made over many years to grow the industry and support the rural community – as well as supporting thousands of jobs.”

Diageo, the world’s biggest drinks company and owner of brands like Johnnie Walker, Gordon’s and Smirnoff, was also pleased.

Andrew Cowan, country director, Diageo Great Britain, commented: “The Chancellor has today given a huge boost to one of Britain’s most successful industries. From Scotch whisky to London Gin, British spirits are admired and enjoyed around the world. In freeing the industry from a debilitating tax policy the Government has given a show of support for these quality products. That will benefit the industry not just at home but also help us as we fly the flag for British business across the world.”

The tobacco industry, inevitably, was less happy with the Chancellor’s inflation-busting duty hikes on cigarettes and RYO, with the TMA and others saying that the rises would drive smokers into the arms of the non-duty-paid market and damage the businesses of thousands of retailers and wholesalers.

Daniel Torras, MD of Benson amp; Hedges owner JTI UK said: “With the UK Government set to ban smaller rolling tobacco and cigarette packs and threatening to make counterfeiting cheaper and easier by introducing plain packaging, now is not the time to add a significant tax increase which will widen the price between legitimate and illegal products. At a time when the Government is making it harder to fake a £1 coin, it could be about to provide criminals an invitation to further profit from fake cigarettes”.

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