Diageo, which owns eight of the world’s top 20 premium spirit brands, has been calling for equivalence across all alcohol taxes. It said the ‘fairest’ idea was to freeze the duty on spirits, and raise it for beer and wine.
Its call came in a submission to the Treasury earlier this week, as part of a Government review into alcohol taxation. This comes as the Scottish Parliament considers introducing high-profile legislation to set a minimum price per unit of alcohol in the off-trade.
Diageo’s stance has set off a pub brawl with the Wetherspoon chief, with Martin mouthing off that he’s going to boycott Diageo’s products if the drinks giant doesn’t shut up.
Now it’s no surprise that such a suggestion should cause Martin to spit his pint across the table. A pub chain like Wetherspoon seems to exist solely to flog food and beer at increasingly unlikely prices. Like a pint and a fry-up for tuppence-ha’penny.
Martin has lost all sense of professional inhibition, calling Diageo ‘a complete bunch of morons’. And you can see why he’s aggrieved. As Martin points out, Diageo is highly selective about where the tax hike should come, suggesting they should freeze the tax on spirits – where it makes all its money – and push up the levy on beer and wine.
‘Tax on a typical pint of beer in a pub that sells for £2.50 is a quid,' said Martin. 'And we've got a complete bunch of morons at Diageo who say it should go up – but not for them!’
Of course, to call Diageo 'morons' is a little disingenuous. The drinks company is merely fighting its corner, and as it's not the body making the legislation it can hardly be blamed if the Government did deem its suggestions entirely sensible and decide to bring them in.
But such a rise is probably the last thing the pubs need right now – the performance of the sector over the past couple of years has been enough to drive even those with the most stout of constitutions to drink.
Booze consumption last year fell the sharpest it has since 1948, according to the British Beer and Pub Association. It dropped 6% in 2009, the fourth annual decline in five years. Apparently we’re now consuming 13% less alcohol than in 2004. The pub sector’s pint glass may have half-emptied as a result, but this decline actually takes us below the EU average, so at least that’s something worth toasting.
It’s all left the government in a weird spot. On the one hand it’s trying to promote responsible drinking; on the other it’s made a commitment to help boost trade in our boozers. Right now it seems the former may be winning. And as the BBPA has pointed out, any spike to beer duty – already 10 times higher than it is in Germany – is only going to harm pubs more. As responsible citizens, we know what we have to do – get down the pub and help them out.