An increase in alcohol tax will accelerate a rise in alcohol abuse fuelled by cheap supermarket alcohol, Wetherspoon chairman Tim Martin has warned, writes Ewan Turney.
In response to a call by Alcohol Concern for an increase in alcohol tax to combat problem drinking, Martin said it would have the opposite effect.
Martin said: “It is not coincidental that the last 5 years has seen an unprecedented increase in taxes and regulation in respect of pubs, contributing to a record number of pub closures and a huge increase in off-sales, supplied by supermarkets and off-licences.
“Paradoxically, alcohol abuse has increased as pub usage has declined, and people drink more frequently in unsupervised circumstances at parties, on beaches and elsewhere.
“The price of a pint of beer in a pub has increased well beyond inflation in recent decades, so that taxes, including VAT, excise duty, rates and so on now account for approximately 40% of pub sales and, in our own case, equate to about ten times our net profits.
“With the average pint in a British pub now costing about £2.50, this means that the government is levying about £1 per pint in tax. Yet less than half this amount of tax is levied from a pint purchased in a supermarket, since VAT and employment taxes in particular are much lower in a less labour-intensive retailing environment.”
He added: “If the government and electors wish to preserve the valuable historic role of pubs in society, the trend towards off-sales needs to be reversed, and this will simultaneously double the amount of tax levied per pint, enriching the state’s coffers.
“Further increases in alcohol taxation will simply put even more pubs out of business and will actually result in consumers spending less per pint, as the switch towards supermarkets, for which alcohol taxes have far less impact, gathers pace.”
