Beer boss raises a glass to alcohol tax defeat

Wednesday 14 December 2016

The Chief Executive Officer of the Liberation Group - the Channel Islands’ largest pub chain - has welcomed the States’ decision to throw out plans for a 5% increase on alcohol taxes.

The proposed 5% increase would have seen alcohol duty rise well above the inflation as part of Budget 2017 - but instead members agreed to an amendment by Deputy Russell Labey, which will cap the rise at 1.5% instead.

The Liberation Group had warned against pushing alcohol taxes way up above the inflation rate would deter them from future investment in the Island.

The decision is a significant bloody nose for the Treasury, who will now have a gap of £690,000 in the Budget.

Mark Crowther, CEO of the Liberation Group, told Express that he was, “…pleased to hear that Deputy Labey’s amendment was successful.”

“I would like to thank all the States Members who voted in support as this is very positive for our hospitality sector and the island of Jersey.”

 During the debate, Deputy Labey argued that soaring booze prices would encourage Islanders to drink more at home instead:

“These increases will push more people out of the controlled environment of the pub or restaurant, and into the home where they will drink more, as that’s what happens, and it’s an uncomfortable truth that this budget refuses to confront,” he said.

But other States Members argued that putting up alcohol prices would encourage Islanders to drink less, and so there would be health benefits, and crime will drop.

Home Affairs Minister Deputy Kristina Moore commented:

“If members go out on a Saturday night in St Aubin or St Helier, they will see members of the alcohol licencing team from the Police, going into licenced premises and checking that all is well, and they have a very good relationship with the licensees in the night time economy.

“I hope members will share with me this acknowledgement that much is being done, in terms of action, but we have also have to deploy the levers we have available to us as an assembly to encourage the general population in this important area.”

Deputy Tracey Vallois though argued the Treasury’s case hadn’t been made:

“I’m being asked yet again to increase impots as it’s an important part of challenging the public’s behaviour on the use of alcohol consumption – I have no problems with trying to assist people…but I’d say to the Council of Ministers, next year when you want to increase impots, come back with all the ducks in order, tell us how all these strategies, all of these objectives, and all of these actions plans are actually assisting in helping this behaviour, and if we still need to increase impots then I might be convinced. But at this point in time…I’m not convinced.”

However, the Treasury Minister, Senator Alan Maclean said that there were unexplained margins in both the fuel and alcohol markets, and suggested that the companies involved in selling those products were making too much money – therefore, he believed there was room for the tax to increase without the price actually going up to the consumer:

“What the pint of beer in the UK is is cheaper by a margin of 56p, that’s what the difference is between beer in Jersey and beer in the UK, despite that the UK has substantially higher taxes and substantially higher duty, 80% more tax in the UK…The high retail price difference in Jersey can tell us just one thing, in my opinion, there is a very large margin at play in the supply chain and amongst the trade.”

But Members threw out the Treasury’s plans on alcohol increases by 24 votes to 17.

A similar attempt to limit a fuel tax increase as well was lost, and that will now go up by 2p a litre of unleaded, an increase of 4.3%.