Saturday, 15 October 2011

What the high strength beer duty actually means

Yesterday I over heard someone say 'Who cares about a tax on high strength beers, it's just a bunch of extreme brewers and beer geeks'. The multi-layered ignorance of that statement led to an outpouring of empassioned vitriol. I wasn't happy.

Was he right though, does this just affect a bunch of extreme brewers and beer geeks? No, but the effects do not just relate to personal fiscal issues  or the wider reaching economic implications either, they relate to things that are far less tangible; Expression, creativity, passion, entrepreneurship, pride, invention, personal adventure, pushing boundaries.

The financial implications are ones we can all understand. A £4 bottle of beer over 7.5% is now £5. If you buy one bottle per week, not such a big deal. If you buy 10, that figure just added £40 to your monthly outgoings. That £40 might not sound a lot, I mean £40 a month isn't much right? Well, yes it is. For folk with kids and responsiblities, that £40 is quite often spent elsewhere already, an extra £40 for something you already buy means you start buying less, or even stop buying it. I have no responsibilities aside from a dog and I'll be buying less beer.

So we buy less high abv beer and the readers of the Daily Express who believe the man driving Diana's car was fueled by Fullers Vintage will clap loudly and feel proud that we as a nation are making a stand against the heathen beer geeks who have such a negative social impact. Of course, because we buy less high abv beer, microbrewerys make less money, because they sell less beer at high margin and then independent retailers have smaller beer choice because they can't sell it to the customer. So now we've not only impacted on the consumer, we are impacting the producer and the distributor. So the negative social externalities increase, not decrease. Not sure Mr Pigou had that in mind when he developed his taxation system....

Surely though, less people drinking high abv beers reduces the social costs brought about by the use of emergency services, public bodies like the NHS, insurance costs to repair the damage caused by rampaging drunkards? If the government had made any attempt to understand the difference between a bottle of Great Divide Yeti and Carlsberg Special Brew they might have realised that instead of solving a problem, they have actually created one.

The sad thing about this duty hike is that it is designed to combat a problem that barely exists, the negative social externalities brought about by the consumption of high strength beers. I am aware that certain elements of society consume cans of Tennents Super in parks and shout randomly at passers by. However, they are not in the park shouting at passers by BECAUSE they are drinking high strength beer, and pricing them out of high strength beer will not eliminate them from the park or change their behaviour when they start drinking supermarket value vodka instead. Treating the effects has no impact on the cause.

All those involved with microbrewing know that our industry is currently bouyant, we are bucking the global economic trend. Unfortunately we have a chancellor with a degree in modern history making economic decisions he doesn't really understand (for example, for those who don't know what 'quantitative easing' is, it's essentially a last ditch attempt to reverse a conventional financial process because you're heading into economic meltdown. Potential for failure is high and means banks could stop lending, or inflation goes through the roof - laymens terms).

I don't for a minute think this duty increase has been implemented to combat negative social externalities, and it most definitely not an example of pigouvian taxation. Those who were consulted for the Review of Alcohol Taxation were the likes of Heineken, Ab-Inbev, Molson Coors, SAB-Miller. Also, some Supermarket chains. Who has been left almost completely unaffected by this duty rise? Big breweries and supermarkets. Surprising? No.

Who has been affected by this? Small breweries (the ones who are bucking the economic trend, proving themselves to be more viable in the current climate and therefore worthy of government support) and independent retailers. The Chancellor said he was going to focus on micro-economics to get the country out of the recession, which is pretty meaningless anyway, but then makes a decision which absolutely the antithesis of that statement. Ergo, the chancellor is a gutless twat who is more interested in appeasing the lobbyists of big business (much of which is based overseas) than helping small local businesses grow enabling local economies to become bouyant and have a positive macroeconomic effect.

The very worst aspect though is this duty inhibits everything we hold dear to us in Britain. It inhibits our spirit, our passion for innovation and design, our love for striving for the best, for pushing ourselves creatively and it tells the non 'beer geeks' that high strength beers are bad, but 5% lager is good. It sends all the wrong messages to all the wrong people.

As usual, rich clueless people have made a decision which is wrong but easy, rather than making a decision that is right, but hard. Fuckwits.

1 comment:

  1. What i hate about statements like 'Who cares about a tax on high strength beers, it's just a bunch of extreme brewers and beer geeks'. Is that in essence that statement is no different than "Who Cares about Racism , its just a bunch of Coloureds" Just because your not part of that group is not a reason not to care, or not to see what might be inherently wrong.