The chairmen of the UK’s major drinks industry trade associations met with the Chancellor of the Exchequer and Business Secretary Lord Mandelson in two separate meetings on March 16 to discuss the upcoming Budget and the impact of tax rises and the economic slowdown on the sector.
The meetings come just weeks after the drinks industry warned in its first ever joint Budget submission that over 75,000 jobs are at risk if the government proceeds with its current plan to further increase taxes on alcohol over the next four years.
Throughout the meetings, the drinks industry urged the Chancellor and Lord Mandelson to abandon the 2% above inflation tax escalator on alcohol due to start in April and called for no further increases in excise duty in this year’s Budget.
In asking for a duty freeze, industry leaders argued that it is essential now to help businesses across the whole sector cope with the most testing economic conditions. This will save jobs and help to sustain Treasury revenue that would be otherwise at risk as a result of falling alcohol sales.
Research by Oxford Economics included in the industry’s Budget submission examined the effects of last year’s 17% leap in excise duty and the implications of the four year tax escalator scheduled to start this year.
Its impact study forecasts:
A spokesman for the five trade associations commented:
“We appreciate the opportunity to make our case directly to the Chancellor and Lord Mandelson and hope that they will take a close look at the potential impact on employment of any further tax increases."
"The Government has a real opportunity next month to reverse its planned tax increases on the drinks industry to protect jobs and Treasury revenue.”
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