The government of United Kingdom (UK) disregarded calls by the community to increase alcohol taxes in the budget. As the UK chancellor, Rishi Sunak announced in the 2021 budget speech, all taxes on beer, wine and liquor have been frozen for a second consecutive year.
Protecting public health has become ever more important during the ongoing COVID-19 pandemic. Nevertheless, harm caused by the products and practices of the alcohol industry have escalated unmitigated during the health crisis. As Movendi International reported previously, the Institute of Alcohol Studies (IAS) COVID-19 briefing found alcohol use polarized during the pandemic. Those who were consuming less alcohol reduced their consumption even more or became alcohol-free but those who use alcohol heavily increased their use even more.
The pandemic brought into sharp focus the existing problems caused by alcohol in the UK. The health and social cost of the rise in alcohol problems is evident as deaths caused by alcohol products in England and Wales increased by 16.4% from January through September 2020.
Cheap alcohol fuels massive harm
Cheap alcohol products in the UK increase heavy alcohol use. The alcohol industry is well aware of this and aggressively lobbies to maintain cheap prices. The cheaper alcohol is, the higher are the sales for the industry. Cheap alcohol specifically preys on already vulnerable people, for example people with heavy alcohol use or people from lower socio-economic groups.
A 2018 report from the Institute of Alcohol Studies showed that heavy alcohol users only make up 25% of all alcohol users but provide 68% of industry revenue.
The debate on whether to increase alcohol taxes takes place every year in the UK. And every year since 2012 the tax duty on the alcohol industry has been cut or frozen. The citizens of the UK have suffered the brunt of this decision and even pubs and bars see no positive effect.
The tax cuts since 2012 took the lives of 2000 people, caused 61,000 avoidable hospital admissions and fueled 111,000 alcohol-related crime cases.
Ahead of the 2021 budget communities called for a 2% rise in taxes. This would be an effective solution to the cheap alcohol problem. A study by the Institute of Alcohol Studies and the University of Sheffield found reintroducing the duty escalator (abandoned in 2013) would cut alcohol consumption in England to 2.2% below 2012 levels by 2032.
Who really benefits from the tax cuts?
Despite all the evidence, and the obvious need for increasing taxes on alcohol in the COVID-19 context the UK government decided to freeze alcohol taxes, again.
The freeze will not help the restaurant or pub industry much either. Not even people who go to pubs or restaurants will see any effects. The individual effect of the new tax cuts equate saving of 2p on a pint of beer, 1p on cider, 8p on a bottle of wine and 30p on 75cl bottle of Scotch whisky. In a survey of people who went to pubs in the North East of England carried out by Balance in 2018, a majority saw no benefit of tax cuts passed on to them. In terms of pubs itself, they have to close down much more frequently since the tax cuts. Cheap alcohol in supermarkets is a bigger problem for these businesses than taxes.
The real beneficiary of the tax cuts is the alcohol industry. It is as much evident since Diageo – one of the world’s largest alcohol giants – was the cheerleader in praising the UK government for freezing alcohol taxes.
It is absurd that despite the mounting strain that alcohol places on our NHS and public services, the Government has taken the decision – yet again – to freeze alcohol duty, prioritizing the interests of the alcohol industry above this country’s health,” said Ian Gilmore, the chairman of the Alcohol Health Alliance, as per, The Telegraph.Ian Gilmore, Chairman, Alcohol Health Alliance
The Telegraph: “Rishi Sunak freezes tax on alcohol to boost pubs forced to close by Covid“
Just Drinks: “Diageo leads praise as UK freezes alcohol duty“