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Drinks chiefs meet Mandelson and Chancellor

Published:  17 March, 2009

The chairmen of the UK's major drinks industry trade associations have discussed the deepening crisis within the trade with the Chancellor of the Exchequer and Business Secretary Lord Mandelson.

Up for discussion in two separate meetings on Monday were the upcoming Budget and the impact of tax rises and recession on the drinks sector.

The delegation included the British Beer and Pub Association's Michael Turner, the Gin and Vodka Association's  Ian Jamieson, Fenella Tyler of the National Association of Cider Makers, Paul Walsh of the Scotch Whisky Association and the Wine and Spirit Trade Association's Christopher Carson.  

The meetings came just weeks after the drinks industry warned in its first ever joint Budget submission that over 75,000 jobs are at risk if the Government proceeds with its current plan to further increase taxes on alcohol over the next four years.

In the meetings, the drinks industry urged Chancellor Alistair Darling and Lord Mandelson to abandon the 2% above inflation tax escalator on alcohol due to start in April and called for no further increases in excise duty in this year's Budget.

Asking for a duty freeze, industry leaders argued that it is essential now to help businesses across the whole sector cope with the most testing economic conditions.

It was also argued that such a move would save jobs and help to sustain Treasury revenue that would otherwise be under threat as a result of plummeting alcohol sales.

Research by Oxford Economics included in the industry's Budget submission examined the effects of last year's 17% leap in excise duty and the implications of the four-year tax escalator scheduled to start this year.

Its impact study forecasts: A further 75,000 jobs at risk in the drinks industry; a drop in alcohol sales by over 11% and consumer prices rising by 17%.

Tax revenue from alcohol £1.6 billion lower than original Treasury estimates.

A spokesman for the five trade associations said: "We appreciate the opportunity to make our case directly to the Chancellor and Lord Mandelson and hope that they will take a close look at the potential impact on employment of any further tax increases.

"The Government has a real opportunity next month to reverse its planned tax increases on the drinks industry to protect jobs and Treasury revenue."