Budget cheers on drinks duty

Osborne reduces tax on cider, beer and spirits but tobacco is hammered again in last changes before election

Chancellor George Osborne’s cuts to duty have been warmly received in the drinks industry.

DRINKS industry leaders were cheered by a series of alcohol duty cuts announced in Chancellor George Osborne’s final budget before the general election.

A cut in beer duty, with a penny off a pint, a 2% cut for spirits and most ciders, and a freeze on duty on wine have been welcomed by manufacturers and retail groups.

David Frost, Scotch Whisky Association chief executive, said: “This is a historic decision and only the fourth time whisky duty has been cut in a century. 

“The Chancellor’s announcement will be toasted across the whisky industry.”

Denis O’Flynn, managing director of Pernod Ricard UK, said: “While it is disappointing that the UK’s 30 million wine consumers did not receive a duty cut as well, we are pleased that the Chancellor has chosen to freeze wine duty at its current rate. This is certainly an improvement and a good first step.”

Osborne also cancelled September’s fuel duty rise and proposed a consultation on tax relief for local newspapers, which the NFRN expressed interest in.

CEO Paul Baxter added: “We are pleased to see the government help independent retailers through alcohol duty cuts and freezes, yet with the other hand the Chancellor has increased the tobacco duty, practically encouraging the illicit market.”

Tobacco duty went up 2% above inflation, adding 16p to a typical pack of 20 cigarettes.

Daniel Torras, managing director of JTI in the UK, said: “Now is not the time to increase tax on tobacco which will widen the price between legitimate and illegal products.”

Giles Roca, director general of the Tobacco Manufacturers’ Association, said: “The illegal market is clearly growing as price-conscious consumers seek cheaper products elsewhere. Whilst we recognise the Government’s commitment to a renewed anti-illicit tobacco strategy, further tax rises will simply undermine these efforts.”