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Beer sales dry up as tax throttles the pint

http://uk.finance.yahoo.com/news/beer-sales-dry-tax-throttles-082025682.html

The Telegraph seems to think that as a nation, we drank 1.5 million fewer pints per day in the final quarter of last year.  They also note that on and off trade fell about equally.

Now poor weather, rising taxes and less disposable income will all impact on this of course.  To be honest, I had no idea that beer was subject to a tax-escalator but can well believe that taxes are up 42% since 2008.  You may notice that unlike actual escalators, government ones never seem to stop.  With beer sales down in 2011 as well, you have to wonder if this is a deliberate policy of destruction being inflicted on the pub trade.  It must be obvious to even the most empty-headed MP that you can’t just keep jacking up taxes without killing the goose.

But what really struck me about this story is what it didn’t say.  Perhaps it would be more accurate to state

“1.5 million fewer pints that the government can extract revenue on were purchased from licensed suppliers.  We have no clue how many people are now home brewing or buying off the white van man thus showing that the Laffer curve is alive and well”

This possibly explains the rise in these god-awful shows trying to show the absolutely ghastly tossers who work for HM customs as some sort of heroes when they are in fact brainless drones who would round up people for ‘re-education’ camps if so instructed.  Thus we see people bringing in a few hundred quid’s worth of tobacco or booze treated like they are Bin Laden and asked to ‘prove’ the product is for their personal use.  Last time I checked, they were supposed to work for us, so it really should be a case of ‘prove I am a criminal or Foxtrot-Oscar’ rather than having your goods seized (i.e. stolen by criminals).  It is a high bar, but this lot maybe more loathsome than tax inspectors.

The government might talk about the big society but its just empty rhetoric unless you mean a smokeless, booze-free, joyless exercise in government approved activity (which they themselves shun of course).  About as far removed from spontaneous, ground-up community activity as it is possible to imagine.  Culture doesn’t need government encouragement or subsidy.  If it is popular enough it will survive on its own.

10 Comments

  1. Mr Ed says:

    One of the pretexts for excise tax escalators is that the State has a duty to promote ‘public health’, and, since it provides health care (not all is Mid-Staffs slaughterhouse quality), and resources are rationed, it therefore has to reduce consumption of those things that might make the helots ill, as it will bear the cost of the helots’ health care (well, it will have to seize the resources to provide health care).

    A splendid example of the isolated intervention leads to Socialism thesis of L v Mises.

    There is a poster dating from c 1970 in the Lord Nelson pub in Southwold showing the prices of pints in old and new money (LSD etc.). A pint of bitter was 11 new pence, Broadside, a stronger bitter 12p per pint, with Tally-Ho barley wine 13 new pence (also sold in nips, a 1/3rd of a pint). Now the same pub sells pints at around £3.50p, a 29-fold increase in price over 43 years. A lot of people could drink themselves to death for £1 in 1970.

    The currency has been destroyed, the solace of beer is discouraged. When did politicians ask for a mandate for beer escalators? Who is driving these policies past politicians’ noses? Why don’t politicians stop them, if only for a token gesture? (I think I know).

  2. bloke in spain says:

    I’m not so sure you’re right about price causing a fall in beer sales. The rises tend to be in small increments & drinkers will usually dig a bit further down the pocket for a few coppers. If it was purely price, the amount it’s risen the past few years, there’d be few punters buying beer at all. Not even sure pub booze is price sensitive. You’d need to explain the willingness to pay twice as much, for essentially the same product, because the label’s a different design. And there’s the old proverb. Man drinks the first drink. First drink drinks the second. Second drinks the man. How many give a toss how much the beer is by the end of the evening? It’s not a rational decision or they’d never sell tequila slammers.
    I reckon this is long term fallout from the smoking ban. What with the rotten summer you had up there last year, connoisseurs of the weed have got pissed off with huddling in the rain & wind & opted for whatever they’ve opted for. Then it doesn’t just effect the tobacco addicts because pub going’s a social thing. Being unable to smoke may not be a problem to the non-smoking customer but standing on your own in a bar when your mates are elsewhere rather misses the point. And it’s taken a while to work through because social habits are sticky. Took nigh on a generation between when the serious drink/drive clamp down came in to when not drink/driving became socially normalised.
    On the brighter side. Long live the Laffer Curve. Especially if minimum pricing’s brought in. Last time I bought a legitimate tobacco product in the UK was around Y2K. Then I found a helpful Turkish grocer was doing smuggled under the counter & never looked back. Saved a fortune. It’s not just smuggled & home brew beer. Distilling’s just made for clandestine endeavour. Much easier than growing skunk cannabis. Equipment & materials are cheap & readily available. Tubs & stills easily concealed. Knowhow? Lot of my East European friends have that. Common practice back home. How helpful of your government to let so many in. Great thing is, once the retailing side gets underway, it’ll be like the baccyman & the Chinky does the snide DVDs. Part of life’s rich pageant. And when it’s established it won’t go away. Guy I know in Southern France inherited the family distilling licence. Entitles him to brew a few hundred litres a year. Keeps the official still in the atelier by the house. The other stills, produce a few thousand, are elsewhere. And he’s working against a supermarket price for a bottle of cheap brandy at 7€. Sells out. It’s not a reduction in tax take. It’s all the tax gets lost. Couldn’t be better. Bastards deserve it.

    Na zdrowie!

  3. bloke in spain says:

    Interesting figures there Mr Ed. Wonder what fags would be? 50x?

    And for comparison; Despite over 4 decades of aggressive interdiction the price of cannabis has risen only tenfold. Cheaper in real terms. Can’t say I know what coke was in 1970 but that’s only doubled since the 80s

    Maybe we’d be better with prohibition.

  4. John Galt says:

    For myself, while I am annoyed about the effect that the combination of the smoking ban and increased price of alcohol on licensed premises, I am not surprised. In fact if Dave “hug me because I’m a fucking idiot” Cameron gets his wish on minimum alcohol pricing then the triple whammy might just about finish off the majority of legal alcohol sales.

    Who loses? The state, as it is doing nothing more than proving the extent of the Laffer curve in these areas of taxation. However, unlike other areas of the economy, once pubs are gone then a future reduction in rates will not cause them to reappear again.

    How many people do you know that have built and stocked their own bars, some have even converted sheds and garages into “pubs” to recreate the atmosphere (and the prices) that have been effectively outlawed.

    Making your own beer is a simple matter of planning, time and preparation and used to be a hobby of many a working class man until the end of the 1970′s. It wouldn’t take much to return to this, but with volumes that pale into insignificance with the 1970′s hobby. Instead of struggling to find a decent sized demi-john, I can easily make and prepare batches of beer in 60-gallon PET plastic drums for a fraction of the price at the pub bar stool.

    Equally, having both lived and worked in Muslim countries where hard liquor was illegal, I know how easy it is to set-up a decent (i.e. methanol reducing) triple distillation plant which will produce Poitín of around 90% ABV. This needs to be mixed as part of serving, usually with fruit juice or in a punch, but with patience can again be made for a fraction of the price of an equivalent fully taxed vodka.

    All the nanny-state policies are going to do is reduce tax revenues and force people onto the unregulated black market. Do we REALLY want to introduce the worst excesses of Prohibition era America into the UK?

    http://www.readersheds.co.uk/share.cfm?SHARESHED=1435
    http://www.readersheds.co.uk/share.cfm?SHARESHED=2219
    http://www.readersheds.co.uk/share.cfm?SHARESHED=3038
    http://www.readersheds.co.uk/share.cfm?SHARESHED=3913

    Notice anything about the above “private pubs” (which is what they effectively are)? They include all of the things that were traditional in pubs, but have now mostly been banned by the nanny-state lobby.

    I wonder how long it will be before they attempt to make possession of more than a single adults recommended daily allowance of alcohol in the home illegal?

    Watch this space…

  5. Mr Ed says:

    @ Bloke in Spain. i’m trying to remember what fags cost when I was a teenager 30 years ago and I had the odd Lambert and Butler, last time I looked in a supermarket it was something like £6.70 for 20.

    So taxes are driving substitution for those so inclined, who would have thought it? Here comes another intervention.

  6. Paul Marks says:

    British taxes are absurdly high – yet there is a massive government deficit.

    So Mr Media and Mr Academia – what do you conclude from this?

    “Government spending is too low – there should be increased public investment”.

    Paul slowly, but painfully, bangs his head against the wall.

  7. RAB says:

    Mr Ed, fags cost around 60p a packet of 20 in 1978, and 80% of that was Govt tax then too.

    Various factors have conspired in the demise of that great fundamental British institution, the Pub.

    Tied houses linked to badly run and complacent Breweries is one. Massive Govt taxes is two, but the main one, and the one the great and the good will never admit to, is the Smoking Ban. Pubs have been closing at the rate of two a day since then.

    We Brits are a socialble and convivial people. We like to mingle and gossip and spread subversion along with having a few pints and a smoke. Even with a pint now costing around £3.60 we would put up with it for the Crack of going down the pub to be with, and make new friends, even though you can buy 3 litres of good Cider from your local shop for £4.50 and get five pints odd out of it.

    But with the smoking ban, the cost and the hassle just aint worth it anymore, hence the decimisation of the Licenced trade.

    I’m thinking of opening RAB’s Smokeasy and Shebeen. Anyone interested?

  8. bloke in spain says:

    L&B Gold in Spain are £3:62, tax inc. My preferred drinking hole sells draught Mahou (lager) £1.66 pint. Bottle vodka at the supermarket £3.17 Wine starts at 60p/litre And you wonder I correspond from here?

    And it’s the sheer bloody mindedness up there. We got our no-smoking orders new year before last. EU bunged Madrid a wedge of money which, needlessly to say, was hoovered up by the pols with never a thought for public opinion. Most bars have a roofed terrace with clear or transparent plastic sheeting on all three sides for the winter & it’s OK to smoke there & comfortable with the gas guzzling space heaters they’ve all put in. (Bar I use in the mountains couldn’t give a monkeys. Tobacco smoke’s more of a novelty than a problem. They’ll sell you 1/2kg of primo weed over the counter. The habit of locals taking their guns to the bar seems to keep the Guardia away. Local Guardia chief’s banged up for drug smuggling anyway.) France takes it a bit more seriously but a lot of places have provided for smokers & I go bars where it’s simply ignored. My port of call in Northern France is slap up agin the border so it’s a walk over the road into Belgium where smoking permitted bars outnumber the spoilsports.
    But Brenda’s tatty little realm! Jeezus! Last time I was misguided enough to cross over, my old local had erected a ‘smokers shelter’. Bit of roof by the car park with a windbreak down one side. Rain sodden bench & a water filled bucket for dog ends. Standing on the pavement, outside an office, tokeing an oily out of the rain under their awning, had some flat capped security clown come out told me I couldn’t smoke on the public footpath. Seemed genuinely surprised when I told him to “Go f**k yourself.” Threatened to call the police. Where’d he find one of those on a wet afternoon?
    Why the hell do you take this shit?

  9. Martyn Jones says:

    I think effective prohibition is on the cards some time during the next 10-20 years. No doubt it will start with a ‘two glasses of wine’ maximum restaurant license restriction on licensed premises. Eventually HMRC and local authority ‘task forces’ will be tasked with breaking up private drinks parties like Rabs.

    For the children, of course.

  10. John Galt says:

    @RAB:

    How long will it take you to get your speak-easy up and running? I can do a great line in bathtub gin, also works as a decent paint stripper.

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