The changes to the alcohol duty which come into force today have not gone down too well with the hospitality industry in Northern Ireland, saying that the increases on certain drinks will heap more economic pressure on clubs and bars. And that these increases will have to be passed on to the consumer with the possible effect of this fuelling inflation ever further.
The Government Insist The Changes Will Help Bars And Clubs
There are a total of 745 clubs and pubs in Northern Ireland and although there will be less duty on the price of a pulled pint there will be more duty on spirits. The government insist that the changes have been introduced to help pubs compete more easily with supermarkets. The Secretary of State for Northern Ireland Chris Heaton-Harris is quoted in an article on the Belfast Live website, saying:
“These great initiatives will benefit over 700 pubs in Northern Ireland and provide support to local businesses.
“Thanks to our departure from the EU and the Windsor Framework, the positive effect on the economy of this move will provide a welcome boost to Northern Ireland’s hospitality, food and drink industries.”
The Immediate Future Remains Challenging
However the hospitality industry take a very different view on the changes to alcohol duty, saying that they will only add to the stresses that the sector is under already, with issues such as inflation, rates, National Insurance contributions and insurance to cope with. A spokesman is quoted in the same article, saying:
“The immediate future remains challenging, and it is vital that we ensure our valued customers understand the price increases are down to the Government – not hospitality businesses,” he said.
“This has left hospitality businesses, who are fighting to break even, no choice but to pass on the significant duty increases to customers.
“This is heaping misery on customers and will damage hospitality businesses at the same time.”
He said taking into account overheads for labour and bills, a publican is likely to be making around 50p on a pint.
“That’s just not sustainable at a time when costs are rising all around us,” he said.
“The hospitality sector is one of the highest taxed and undervalued sectors in the UK, but we will continue to work in partnership with UK Hospitality to press the British Government to recognise the importance of the industry.”
Below are the key changes, again taken from the same Belfast Live article:
‘All products taxed in line with alcohol by volume (ABV) strength, rather than different duty structures for different drinks.
Fewer main duty rates, from 15 to 6, to make it easier for businesses to grow and operate.
There will be lower taxes on lower alcohol products – those below 3.5% alcohol by volume (ABV) in strength – a huge growth area in the drinks industry.
All drinks above 8.5% ABV will pay the same rate regardless of product type.
‘This will mean that a number of drinks will see duty reductions. Irish cream will drop by 3p, cans of 5% ABV ready to drink spirit mixers by 6p, Prosecco by 61p and 500ml 3.4% pale ale by 20p a bottle.’