Thursday, 28 February 2013

The Golden Goose ...

Firstly a huge thanks to Tandleman, for putting up a link to the Wirtschaftsfaktor Bier ... or the English title of this mighty report from the Brewers of Europe - The Contribution made by Beer to the European Economy.

With reports from the various brewers' associations from the EU27 in 2010 this compendium of research shows not just how important the brewing industry is to the European economy but through its dedicated pages to member states we can get a snapshot of just how important the brewing industry is to the British economy. (By the way, the report for the UK starts at page 252). 

The report concentrates on brewing and the economies (sic) for the period 2008 - 2010, which, as it must take an incredible amount of collation and research I think we can assume are the most current figures available ... what has happened since 2010 will be a matter of conjecture, but if the trends in reduced brewing volumes and per capita consumption of recent years the following extracts can be viewed as conservative at the very least.

Trawling through this almanac of statistical analysis there are a couple of interesting figures that you may wish to share with your MP before the next debate on scrapping the beer duty escalator (next Tuesday, March 5th) or the impending budget.

To save you time with an abacus this means that in the two years from 2008 the total number of jobs in the UK "due to beer" fell by some 57,000.

Using today's exchange rate of 0.87 euros to the pound, this means that in the same two years the total "value added" to the UK economy by beer fell by £2,193,000,000 ... yep that's over £2billion pounds !

So each job in brewing generates 44,807 euros or  £38,982 in taxes and duty ... this alone amounts to some £2,221,979,130 in lost revenue to the Exchequer.

I know your brain must be aching by now, but I promise you this is the last graph from the report...

This 8.6 billion euro or £7.482 billion added value means that in total brewing alone contributed some 15.321 billion euros or £13.330 billions to the UK economy in 2010.

If the trend in fall of inputs to the economy in 2008-2010 of around 17% was extrapolated for the period 2010-2012 this would mean another £2.266 will have been lost.

So over a period of four years one can make an educated guess that getting on for £4.5 billion has been wiped off the books.

I have only one question to ask ...  
"Can it be entirely coincidental that this loss to the economy occurs during the period of the beer duty escalator?"

The estimated loss to the exchequer by scrapping the duty escalator would be some £100 million per annum over the remaining period of the original term for the escalator (due to end in 2014/15) ... so let's say £200 million before the next general election.

If current trends continue and another £2 billion is lost to the UK economy over the next two years (let alone the knock on effect of another 57,000 job losses) doesn't it seem a little crazy to keep the escalator?

P.S. using just the 2009 figures The Sun estimates that over 29,000 jobs for the unemployed young (18-24) have been lost ... another factoid for the Chancellor

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