Big Brewer Slams 40% Beer Tax Rise

The world's second biggest brewing company, London-listed SABMiller, has slammed soaring UK beer duty taxes.

As it announced a 12% rise in half-year profits to £1.72bn, the firm behind the Foster's and Peroni brands hit out at a 40% rise in tax endured by drinkers over the past four years.

It has been claimed that the beer duty escalator, which raises the tax annually by 2% above inflation, has added 55p to a pint since it was introduced in 2008.

The policy has been bitterly criticised by fellow brewers and the pub industry, which continues to suffer from closures due to the consumer spending squeeze.

According to the British Beer & Pub Association, pub beer sales declined by almost 5% - more than 50 million pints - between July and September.

An angry e-petition response to the tax from drinkers has already prompted a Parliamentary debate.

Gary Haigh, the UK boss of SAB, was quoted in The Sun newspaper on Thursday as saying that duty rises were the "crime of the century".

Chief Financial Officer Jamie Wilson told Sky News: "It's very important that Governments look at the effect of excise across the business as a whole and decide whether it is an equitable way to tax beer across all different alcohol categories.

"Taxing beer more and more tends to be counter-productive in terms of a revenue-raising policy because if you start reducing the volume of beer that is then being drunk then clearly you're not making any more money by putting the taxes up.

"It's a factor in our business - we have been successful because of the strength of our brand in attracting consumers in drinking our products but clearly if we had a different pricing policy then perhaps we would be able to do even better."

In its results, SAB said its acquisition of Australian brewer Foster's and strong growth in Latin America helped boost profits against a backdrop of a 10% fall in earnings in Europe.

The company raised its interim dividend by 12% but said it was cautious on its prospects for the second half of the year, in part due to tough economic conditions in some of its markets.

Despite the warning, its share price rose 6% in morning trade.

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