ACS

14 June 2010

Commentators have speculated that the Budget will include further increases in alcohol duty today, with one newspaper suggesting that the Chancellor will impose a second 5% duty rise when he delivers the emergency budget on the 22nd June.

ACS set out its major concerns that more duty increases will fuel the illegal trade in its submission to the Budget in May 2010. The illegal trade in alcohol and cigarettes account for more than £5 billion in lost revenue to the Treasury and legitimate businesses.

ACS Chief Executive James Lowman commented: “The pressure of Government to raise revenue is significant but a second alcohol duty hike in the same calendar year is not the answer. Every penny that prices increase pushes more consumers over to buying their products from illegal sources and so is likely to be counter-productive and damaging to legitimate licensed businesses.

“Duty increases are often seen as a politically justifiable option for a Chancellor seeking opportunities to increase revenue. However such a move at this time would pre-empt and undermine the credibility of the Coalition Government’s commitment to a detailed look at the evidence surrounding alcohol price and taxation.”

“ACS is happy to play a constructive role in such a review, and to understand more clearly how restrictions or interventions will have a measurable impact on alcohol harm.”