Wednesday 13 March 2013

3p extra duty on a pint

UPDATE: Will he, won't he? Expectations now that Osborne will pull back from another beer duty increase...

The price of a pint of beer is set to rise by at least 3p after next week's Budget, if the Chancellor George Osborne follows his previous practice and uses the "duty escalator" to calculate the new level of duty.

The escalator is designed to add inflation plus 2% to alcohol duty per year, using the higher RPI measure of inflation, until 2014-15.

The British Beer & Pub Association warns that once brewers pass on the 3p increase, pubs could actually add as much as 10p to the average £3.09 price of a pint.

Currently bitter is £2.83 a pint, typically, and lager is £3.22.

The duty escalator was introduced in 2008 under the previous government. It has been used ever since.

Along with VAT, tax and duty accounts for around a £1 of the price of a pint of beer.

Prices are already on the rise because of the increasing cost of raw materials and energy used in brewing.

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