The Shout Magazine (New Zealand)

UK Government cuts keg beer tax but no relief for New Zealand industry

More than 38,000 UK pubs and bars have seen a tax cut on keg beer from the start of August as the Government’s alcohol duty changes take effect.

The Brewers Association of New Zealand, Brewers Guild of New Zealand and Hospitality New Zealand say they all applaud the UK Government on the attitude towards the hospitality and brewing sectors in their country as it follows through with its promise to support the British pub sector.

Economic shocks such as Brexit and COVID have left the UK beer industry in a difficult position with many businesses closing or reducing trading hours just to survive the current economic shock.

“In the UK the excise duty paid on drinks on tap in pubs will be up to 11p lower than at the supermarket,” says Brewers Association Executive Director, Dylan Firth.

“The changes are designed to help pubs compete on a level playing field with supermarkets, so they can continue support communities across the UK.

“The New Zealand industry has called for a differential keg rate on beer for a number of years with little appetite from the current government.

Which would bring us in line with other major economies we trade with including Australia.”

Firth says New Zealand’s already high excise rate has been increasing again and again.

“The annually adjusted alcohol excise rate for 2023/24 was increase by 6.65% on July 1 after a record 6.92% increase in 2022.

“The Government took approximately $1.29b alcohol excise in 2022/23,” he says.

“This year’s excise increase will cost Kiwis an extra $86m per year, including an increase of $28.9m for beer drinkers alone.”

He 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.”

Steve Armitage, CEO of Hospitality New Zealand says Hospitality NZ has long been a supporter of a differential keg rate for beer, particularly given the recent hikes to excise tax as inflation has risen.

“Our venues need all the help they can get in the current environment, and we would like to see the NZ government follow suit with the UK to support the industry.

“Bars, brewers and beer drinkers need action now to get the beer tax rate back to a sensible level and we are jointly calling on the New Zealand Government to freeze excise on beer in 2023 and introduce a new lower rate on keg beer.”

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