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UK Beverage Market – News Update

The UK beverage industry appears to be in turmoil this week as the the Wine and Spirit Trade Association (WSTA) launched a new UK industry campaign aimed at highlighting “unfair” minimum pricing and galvanising public opposition to the measure. This follows the Home Office Alcohol Strategy consultation which is currently seeking views on a number of measures set out in the government’s alcohol strategy which was published on 23 March 2012. The consultation runs for 10 weeks from 28 November 2012 until 6 February 2013. The ‘Why Should Responsible Drinkers Pay More?’ campaign, set up by the Wine & Spirit Trade Association, is being supported by a bespoke website. The site invites users to sign a petition against minimum pricing and e-mail or tweet a pre-written letter to their MP. The UK and Scottish Governments are currently embroiled in a legal battle with the Scotch Whisky Association (SWA) over the measure in Scotland. The SWA launched a judicial review against the measure in July, which has already gained Royal Assent in the country.
Also, today leading medical bodies are calling for a 20p-per-litre levy on soft drinks to be included in this year’s Budget. More than 60 organisations, including the Academy of Royal Medical Colleges, which effectively speaks for the entire medical profession and the Royal College of Paediatrics and Child Health, are backing the recommendation by food and farming charity Sustain. They say it would raise £1bn a year in duty to fund free fruit and meals in schools to improve children’s health. The soft drinks industry says raising taxation is unnecessary.
Gavin Partington, director general of the British Soft Drinks Association, said a fat tax on fizzy drinks would not reduce obesity. “Over the past ten years, the consumption of soft drinks containing added sugar has fallen by 9% while the incidence of obesity has increased by 15%.”.
Meanwhile, calls are being made for the government to scrap the controversial beer duty escalator to help struggling pubs across Cumbria and the rest of the UK. The tax was introduced by Labour in 2008 to tackle the problem of binge drinking and sees tax on beer increase by 2% above inflation every year.
According to new research by the British Beer and Pub Association (BBPA) beer sales have fallen for the eighth year in a row with 381 million fewer pints drunk last year. The BBPA has said the figures showed how the Government’s “damaging” tax policy was hitting the pub trade. More than 100,000 people have signed a petition in protest at the extra tax, urging the Chancellor to announce in the March Budget that it will be scrapped. Pub beer sales slumped by 4.8% n the final quarter of 2012 compared with a year earlier, with total beer sales down by 4.7% over the year. Around 138 million fewer pints of beer were drunk in the final quarter of 2012. Sales of beer in supermarkets and shops fell by 7.5% in the final three months of 2012 compared to the previous year, while sales in pubs, bars and restaurants were down by 4.8%.
Brigid Simmonds, chief executive of the BBPA, said: “These figures show that the Government needs to stop its full-on tax assault on our vital beer and pub industry. We’ve had tax hikes of 42% since March 2008, which is hugely damaging and completely unacceptable for such an important manufacturing sector.”

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