ARE HIGH DUTIES ON ALCOHOL ACTUALLY REDUCING CONSUMPTION?

With wine, spirits and beer industry bodies and producers (including the Craft Gin Club) calling for the government to lower taxes on their products, data is emerging that could counter their arguments. During the period of high taxation on alcohol, particularly over the past seven years, alcohol consumption and deaths caused by alcohol in the UK are at record lows:

• The number of young people claiming that they do not drink rose by 40% between 2005 and 2013
• Binge drinking fell by 17% between 2005 and 2013 and by 1/3 amongst younger demographics
• Alcohol related deaths dropped to 14 per 100,000 people, the lowest figure since 2000

The number of young people claiming that they do not drink rose by 40% between 2005 and 2013

Binge drinking fell by 17% between 2005 and 2013 and by 1/3 amongst younger demographics

Alcohol related deaths dropped to 14 per 100,000 people, the lowest figure since 2000

Will these statistics hurt the arguments of those in the alcoholic beverage industry pushing for lower taxes?

Unlikely. There may be a correlation between the decline in alcohol consumption and higher taxes but taxes - which began to rise on wine and duties in 2008 - don’t appear to be the cause of that decline - which began in 2005. 

More than anything, the decline in alcohol consumption and deaths likely has to do with the cultural shift sweeping the nation. Consumers are trading upwards - more quality products, less quantity. They are more concerned and aware about what they put in their bodies as well as how the things they put in their bodies taste. They are more experimental which is encouraging the proliferation of new food & drinks trends including the craft beer and spirits movements.

This cultural shift didn’t appear out of nowhere. It’s been occurring in the United States for quite some time and has spread through the countries of Northern Europe. It has been the cultural norm in Southern Europe for centuries as people in those cultures have always taken the time to produce and consume quality. For that, the taxes on their alcoholic beverages has always been significantly lower than the same taxes in the UK. Considering that all of those Southern countries bar Portugal have a higher life expectancy than the UK, low taxes on booze has shown no perceivable effect on their inclination to drink more or less.

The point of these arguments? If taxes and duties on wine, spirits and beer are lowered a 21st Century version of the Gin Craze will not ensue. What will happen is that more small, local wineries, distilleries and breweries will open, injecting more innovation into what until relatively recently has been a staid sector and creating jobs and investment across the whole of the UK. In turn, consumers will continue to explore new products not drinking them to excess, but drinking them to enjoyment. 

To support the craft distilling movement and lower taxes for small entrepreneurial distillers, sign our Small Duties fro Small Distillers Petition: