UK Chancellor of the Exchequer, Rishi Sunak MP, has announced the tax on draught (keg) beer will be slashed to support the hospitality and brewing sectors.

In the Budget announcement, the Chancellor said that from 2023 he would reduce the rate on beer sold through pubs by 5% by creating a new keg beer rate.

He said this was the biggest tax cut for beer in 50 years and that it was “a long-term investment in British pubs of £100m a year, and a permanent cut in the cost of a pint by 3p”.

He also announced that he was cancelling the planned tax increase for beer set to take effect immediately, which will freeze the beer duty rate for a further year.

Brewers Association of New Zealand Executive Director Dylan Firth said he applauds the UK government for their wide-ranging initiatives.

“We feel the impact of lockdowns and level changes here in New Zealand – specifically in the Auckland region – necessitate relief such as this would benefit a large part of the hospitality sector,” he says.

“This is a sensible and welcome decision by the British Government which recognises the
hardship and pain the British hospitality sector have faced during this pandemic and follows precedent set in other countries like Australia that have a lower excise rate on keg beer specifically to support the hospitality industry.

Dylan Firth

“Here in New Zealand, our pubs and clubs have done it just as tough recently with Auckland facing lockdowns longer than most of the world and ongoing restrictions across New Zealand.

“What we are seeing though is New Zealand’s already high excise rate increasing again and again, with the 2022 excise increase expected to be the largest beer tax increase in over 10 years.”

Firth says as other countries cut their beer tax to help the hospitality industry or ease pressure on consumers, New Zealand’s still goes up.

“What this shows is we are out of step on beer tax with comparable countries like the UK and Australia and a world away from major beer producing nations such as Germany, the US and Belgium where the rate is significantly less than we pay here.

“Bars, restaurants, brewers and beer drinkers need action now to get the beer tax rate back to a sensible level and the Brewers Association is calling on the New Zealand Government to freeze excise on beer in 2022 and introduce a new lower rate on keg beer.”

Firth says previously the Government has pointed to excise being set based on offsetting harms.

“It is important to note that beer is a lower strength product than other alcoholic beverages and brewers have invested heavily in developing a range of innovative, exciting, and great tasting low and no alcohol beers.

“This supports more moderate consumption than other products in the market, not to mention hospitality venues being much safer environments where keg beer is consumed.”

The Brewers Association of New Zealand says it supports the regulatory policies that have been announced in the UK on lower-strength products and has been long part of the Australian system, as part of the proposed modernisation of the alcohol excise regime, to better incentivise the consumption of lower-strength drinks.

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