Alcohol Taxation — House of Commons, 2022-07-07
Topic: Mixed Topics
Daisy Cooper (Liberal Democrats, Centre to centre-left): I am incredibly pleased to be able to speak in this debate. I would like to speak about beer, cider and fortified wine—sometimes known in parts of Westminster as a work event The former Chancellor’s relief scheme for draught beer and cider excludes far too many of the small brewers and cider producers that need the most help. The ill-thought-out proposal to impose the 40 litre minimum container size to qualify for help has obviously been dreamt up by someone who has absolutely no knowledge at all about how pubs up and down our country operate. Almost all craft and small batch beers are kegged into a 30 litre container, which is 6.6 gallons for anyone who still wants to reintroduce imperial measurements. A small 4.5 gallon cask for real ale—a pin—holds just 20 litres, and many ciders are delivered to pubs to dispense in 20 litre bag-in-box containers Some 34% of licensees stock products in containers smaller than 40 litres to improve beer quality and choice for customers, while 46% of venues said that some products are only available to them in containers of less than 40 litres and one in 10 venues can only stock containers of less than 40 litres as they do not have the cellar space to sell the larger ones. I hope that the Treasury can finally own up to the fact that it plucked this figure out of the air, and instead give small brewers, cider makers and our struggling hospitality industry the break they need. Will the Minister confirm today that the industry will get the much-needed assurance that the threshold will be lowered to 20 litres after all I also want to talk about fortified wines because the forthcoming changes to the duty regime will have a significant and arguably disproportionate effect on port producers in particular. In my constituency, I have one of the UK’s leading distributors, Fells—a major employer in my constituency and in Hertfordshire more broadly—which is braced to see a dramatic decline in its sales should this go ahead. Aside from the dramatic price increase that will follow the changes, there are very real and legitimate concerns about the implementation costs and the increased red tape. The system changes, administrative burden and ongoing compliance with such a system will have further negative effects. The Government’s objectives for the alcohol duty reform consultation were welcome. They want to simplify the regime and reduce red tape, but the proposals simply do not do that. For wine, the proposed model cannot be described as simpler. Introducing taxation by degree will be complicated, costly and impractical. Unlike other categories of alcoholic drink, there is a far greater permitted tolerance for the alcohol content of wine made from fresh grapes, meaning that without testing every wine at the point excise duty becomes payable, it is not possible to determine alcoholic strength accurately Introducing such a system will disproportionately hit wine-dominant or wine-exclusive small and medium-sized enterprises, importers and retailers, which are an important element of the customer base for my constituency business, Fells. It is requesting that the Government conduct a full and thorough cost-benefit analysis of the impact on the wine sector and that this analysis should be undertaken as a matter of urgency before any such system is introduced. I would be grateful for assurances from the Minister that they would indeed consider running such an analysis Additionally, under the current proposals the suggested model penalises warmer climates. There are limited tools available to vineyard managers to keep ABV down to an acceptable degree, and production rules forbid winemakers from removing more than 2% of ABV. I understand that the Minister has met the Wine and Spirit Trade Association; it is also seeking further meetings because it is looking for an assurance that the Government will instead consider a more workable way of taxing wine by applying a flat rate based on 12% ABV for all wine and 18% ABV for all fortified wine The Government’s proposals would have a particularly negative impact on the fortified wine business. The total UK market for fortified wine is £311 million. Port accounts for £82 million of that, and Fells in my constituency is the leading UK importer and distributor. The Government proposals would add £1.09 duty to a bottle of port, resulting in an 11 % increase on the average price per bottle. Fells estimates that in such a highly price-sensitive market this increase could lead to an 11% decline in sales, or approximately 1 million bottles per annum. Fortified wines such as port and sherry are generally not consumed irresponsibly; they are bought and consumed at festive occasions, to mark exams and graduations, weddings and anniversaries, and at Christmas—they are an occasional treat. But we are in a cost of living emergency when treats are often the first things to go, and therefore this regime could have a huge impact on this market. So I ask the Government to think again, to consult more and not rush this through, and to do that cost-benefit analysis Overall, the alcohol duty reforms proposed by the Government just tinker around the edges in dealing with the pressures facing hospitality. We have a broken business rate system that penalises pubs, restaurants and high street shops. We have spiralling energy costs which remain uncapped for small businesses. We have food inflation and labour shortages. I ask the Government to seriously consider bringing forward a proper plan to protect British brewers, distillers, winemakers and their distributors.