How will the 2008 Budget Affect the Catering & Hospitality Industry?
With all-out war being declared on binge drinking and high-alcohol drinks there is much debate on how the 2008 budget will affect the Catering and Hospitality Industry.
What rises were expected?
A rise in tax on alcohol above the rate of inflation was inevitable, but on which drinks and to what extent was unsure until today. The obvious targets were super-strength lagers and ciders, but with alco-pop’s also in the firing line, there was worry these tax hikes could spread to products more important to the industry.
Tax on wine was also predicted to rise due to the recent worries about middle classes over indulging at home, therefore gaining the ever increasing ‘binge drinker’ title.
What did we get?
At midnight on Sunday, duty rates on Alcohol are to rise by 6 per cent above inflation. Beer is to go up by 6 pence a pint, cider by 3 pence a litre, wine 14 pence a bottle and spirits 55 pence a bottle.
In the future it is planned that the tax on alcohol will rise at 2 per cent above the rate of inflation each year.
So how will this affect the industry?
The challenge of predicting how the British consumer will act is always a daunting one.
The rise on alcohol in the shops could help break the ‘home drinking’ trend and drive people out into pubs, bars and restaurants. If it is indeed the cheap supermarket drink that started this trend, then it is a fair assumption to make. However the recent smoking ban is also a strong contributing factor, and one that certainly won’t change anytime soon.
The opposite worry is that rising taxes on wine and beer will drive people out of bars and restaurants. Although it is the high-alcohol products which are being targeted, this coupled with other factors could see price rises across the board in drinking establishments. With the hops and grain prices at an all-time high, producers are set to raise prices on beer and ale, with one of the main brands rumoured to be planning a 9% rise.
Geoff Kennedy – 12th March 2008
BuyCatering.com – Catering Equipment Suppliers
Tags: alcohol, Budget 2008, Catering, Hospitality