Action on Sugar
Jenny Rosborough, campaign manager at Action on Sugar, said: “We are fully supportive of the sugar tax levy and the commitments we’ve already seen from a growing number of drink manufacturers who’ve started to reduce sugar to less than 5% across popular brands. Sugar-sweetened drinks are the biggest contributor of sugar in the diets of children and teenagers and unless they are reduced these drinks will still contribute to the high levels of obesity, type 2 diabetes and tooth decay, all of which are preventable and cost the NHS billions of pounds each year. We now strongly urge all manufacturers to reformulate and avoid the levy.”
Aston Manor Cider
Gordon Johncox, managing director of Aston Manor Cider, said: “We are very surprised that in the detail of the Budget Statement there is mention of a plan to consult on a new duty rate ‘to target white cider’. We often point to the inaccurate mythology that exists around white cider and we are disappointed that without evidence this announcement has been made. It is perhaps the first time a Chancellor has signaled the intent to use tax to address a public policy concern on alcohol. It is a very blunt instrument to support the flawed logic around how whole population measures might address the circumstances that prompt a minority of people to misuse a range of substances.We will participate fully in the consultation process and provide evidence that dispels the myths that exist and point to the views of relevant professionals that progress is only made when the focus is on the individual in crisis and not the substances they might misuse.”
Association of Convenience Stores
CEO James Lowman said he welcomed the £300m discretionary rate relief scheme announced by the Chancellor but raised concerns over a minimum excise tax on tobacco, the costs for small businesses of introducing new tax reporting processes, and new tax rules for dividends paid to owner-directors.
“The £300m discretionary fund given to Local Authorities could provide welcome relief to the hardest hit by business rates increases. We are committed to working with the Department for Communities and Local Government on the formula for allocating discretionary relief funding across local authorities, and we will help members make their case for rate relief to their local authority. We are disappointed that there has been no targeted relief for petrol forecourts which are some of the hardest hit businesses as a result of the revaluation, but will support these stores in making a case to their local authorities for much needed help.”
“We along with our business groups have repeatedly called for a proper fundamental review of the rates system to ensure that everyone pays their fair share. Businesses like rural petrol stations and convenience stores with cash machines providing an essential service to their communities should not be paying over the odds while internet distribution warehouses enjoy a decrease in their rates bills. We are disappointed that the government is not addressing these issues now, meaning the current inequities in the system will remain.”
”The introduction of a minimum excise tax is likely to increase the lowest price at which consumers can legally purchase a pack of cigarettes. This will drive more customers to the black market, which already costs the exchequer in excess of £2bn a year. More needs to be done on the ground to tackle the illicit trade and help responsible retailers.”
David Haigh, chief executive, said: “The Government’s changes to the sugar tax, confirmed at today’s Budget, and the societal focus on healthy living has undoubtedly had a negative effect on producers of high sugar content products. We calculate that the brand value of Coca-Cola and Pepsi, for example, fell by 7% and 4% respectively over the last year which demonstrates the tangible impact that these changes have had. It is essential for sugary drink manufacturers to take action on these issue to not only protect their brand but secure long-term revenue growth. To address this some brands are taking action. Nestle announced this morning that it is reducing the sugar content of its staple product, Kit-Kats. While this will go some way to mitigate the structural changes in the confectionary market, there is undoubtedly some concern that the continued reduction in Nestle’s brand value may continue, following a 17% reduction in 2016.”
British Beer & Pub Association
BBPA chief executive Brigid Simmonds said: “I very much welcome that the Government has listened to our concerns on this point and withdrawn this proposal.I completely understand the need to make the appeals system as streamlined and efficient as possible, but this should not be at the cost of fairness for pubs.Ratings assessments should be accurate and licensees must receive a fair hearing.”
British Retail Consortium
Helen Dickinson, chief executive of the BRC, said: “We agree with the Chancellor that the world around us is changing quickly and we need to have a business tax system that is fit for purpose in the 21st century. Any review needs to incorporate business tax in its entirety and not be constrained by the technicality of fiscal neutrality around business rates.
“We hope that the relief measures will help some of those businesses hardest hit by the revaluation, albeit only temporarily. However, more short term relief measures continue to add complexity to an already impenetrable system. £435 million is a drop in the ocean compared with the £25 billion a year that the tax raises. This is yet another sticking plaster on a chronically ill patient – an unsustainable property tax higher here than anywhere in the developed world.”
Bruce Fowler, ratings expert at Bruton Knowles, said: “Landlords will be raising a glass to the Chancellor following the government’s pledge to support British pubs as part of today’s budget announcement. Although our economy appears to be much stronger, many pubs are either still suffering from previous years’ uncertainty, or as in many cases, have had to close their doors permanently.Government has pledged to offer a £1,000 discount to pubs with a rateable value of less than £100,000 to help protect them against increased business rates – which will be available to almost 90% of pubs. We are pleased money has been set aside for this industry. It is encouraging that government recognises the importance of pubs in the rural economy as they are often the hub of local villages and towns.”
Colin Valentine, CAMRA’s National Chairman, said: “UK beer drinkers, pubs and brewers have been let down by the Chancellor’s decision to increase beer duty for the first time in five years. The announced two penny a pint increase marks a return to the days when the much-hated Beer Duty Escalator contributed to 75,000 job losses, 3,700 pub closures and a 24% fall in beer sales in pubs. The rise in beer duty will ultimately hit consumers in their pockets and lead to pub closures across the country. The government’s U-turn on beer duty is a real missed opportunity to support consumers. The UK still pays one of the highest rates of duty across Europe, only consuming around 12% of the beer yet paying nearly 40% of all beer duty in the EU. Further beer duty increases will lead to unsustainable price increases in pubs. The decision completely ignores the pressures that are being faced by the beer and pub sectors.”
But on business rates, Valentine said: ”We are delighted that the Government has recognised the vital role that pubs play both in our local communities and our economy by introducing a new rate relief specifically for pubs in England. The announcement of a new rate relief for pubs in England is a ground-breaking step which recognises both the importance of pubs and the unfair impact of the business rate system on pubs. This new relief offers huge assistance to pubs and is a step towards CAMRA’s ambition of securing a £5,000 rate relief reduction for all pubs.”
Bruce Ray, corporate affairs director for Carlsberg UK, said: “The chancellor’s announcement of a rise in beer tax is disappointing news for all of us involved in brewing and selling beer, and particularly those people who enjoy a glass of beer in the pub. Last year’s freeze in beer tax supported investment into the growth and innovation in pubs and breweries – demonstrating the crucial social and economic contribution that our industry makes to the UK. This increase simply risks undoing that good work. This year’s increase will be very damaging to an industry which routinely innovates, creates new jobs, and ultimately supports our beer-loving nation.”
Carolyn Fairbairn, CBI director-general, said: ”This is a breakthrough Budget for skills. There has never been a more important time for the UK to sit at the global top table of technical education for young people. Firms will be looking for ongoing partnership with the Government as they try to make the Apprenticeship Levy work. However, with inflation rising and the cumulative burden weighing on businesses’ shoulders, limited relief for firms hit hard by business rates falls short. Firms are wholly committed to the health and wellbeing of their people, and are pleased to see an increase in spending on social care.”
Children’s Food Campaign
Malcolm Clark, co-ordinator of the Children’s Food Campaign, said: “The Chancellor’s confirmation of the sugary drinks tax rates today is vindication of the efforts parents, campaigners and health professionals have made to counteract industry’s opposition to the tax. It is now over to MPs to pass the legislation, and then manufacturers and retailers to continue to raise their sugar reduction game. It is welcome news that the Chancellor has held his nerve and kept the Soft Drinks Industry Levy rates at the meaningful levels originally proposed. The prospect of those rates has already led to significant sugar reduction moves, and had a positive ripple effect on other sectors, as well as in Ireland and further afield. The experience from other countries shows that the biggest health impact is felt only when sugar-free products are priced cheaper than their sugary counterparts. That £1billion funding to help schools promote healthier lifestyles has been guaranteed is also great news for children’s health.”
Mark Rigby, Chief Executive of business rates specialist CVS said: “Our three requests to the Secretary of State were to help those 25,000 small firms exiting small business rate relief after 7 years and provide protection which the current transitional relief scheme failed to do.
“We specifically asked for discounts to rates bills for pubs- who have seen their numbers fall by over 11,000 during the current tax regime- and, finally, we asked for targeted relief to be made available for those businesses most in need and experiencing significant hikes.
“Those demands have been met in full and both the Chancellor and Secretary of State should be congratulated on listening to the concerns of small business but, more importantly, acting upon those concerns with meaningful financial help.”
Charles Ireland, MD of Diageo Great Britain, said: “Today’s tax blow from the Chancellor is bad for the economy, bad for business and bad for the British public. It is staggering that the Prime Minister stood up in Scotland only on Friday and said that Scotch Whisky is “a truly great Scottish and British industry… and directly supports tens of thousands of jobs”, and just five days later her Chancellor hammers this industry at home. Tax on Scotch Whisky is now so high – nearly 80% of the price of an average bottle will go straight to the government. We believe this duty rate increase will reduce total tax revenue. We are calling on the Government to reverse this punitive tax hike and fundamentally overhaul what is clearly a flawed excise duty system.”
Food and Drink Federation
FDF director general Ian Wright said: “We are pleased to see productivity and innovation at the heart of today’s Budget.We welcome the Chancellor’s commitment to improve productivity, boost R&D and help bridge the skills gap. Access to a skilled workforce is particularly pressing for food and drink manufacturing as we require an additional 130,000 new recruits by 2024. It is important that food and drink manufacturing as a sector is fully recognised in the new technical qualifications and we look forward to being closely involved in their implementation.
“It was also pleasing to see details of how the £4.7 billion from the National Productivity Investment Fund announced at Autumn statement will be invested in science and innovation. A number of global food and drink companies have already chosen to base their R&D centres here and we want the UK to be the number one location of choice for others too.
“The revision of the R&D tax credits system was something we had asked government for and we support. Increasing simplicity around the process for claiming R&D tax credits will benefit companies of all sizes - and SMEs particularly.
“We continue to oppose the Soft Drinks Industry Levy because of its undue focus on sugar (as opposed to calories) and because there is no evidence that it will reduce obesity. Consequently, while we’re pleased to see the Chancellor acknowledge the efforts made by soft drinks manufacturers to reduce sugar levels in their products, we continue to believe that implementation of the Levy should be paused while such good progress is being made voluntarily.”
Fortnum & Mason
CEO Ewan Venters said: “While I accept that the business rates system does need modernisation, London will be hit disproportionately when the law changes on April 1. To give that some context, our rates at Fortnum’s will increase by 49 per cent, and it will be hard for some businesses to cope with such a hike. Nevertheless, it is reflective of London’s success as a global commercial powerhouse.
“On the other hand, the reduction in rates across many high streets and communities across the country will help support a much needed rejuvenation of the British High street. This can only be good for our country, our towns and villages and the wider retail trade.
“The one area the new scheme does not address is a fairer rateable charge to online only businesses, who are typically operating from remote warehouse locations where any increase in rates will be marginal if not actually in decline. I believe this to be an unfair commercial advantage within the digital space, and gives a company like Amazon, for instance, a benefit on top of their low tax bills.”
FWD chief executive James Bielby said: “Today’s Budget made no mention of the tumultuous changes to food and drink distribution what will come with Brexit. Instead it introduces changes which will disproportionately affect our members and their 400,000 retail and foodservice customers. We will work with HMRC to ensure that illicit product does not get a foothold in the UK soft drinks market, and that any duty rate rise for high-strength ciders is introduced in the context of equal measures to tackle irresponsible promotions in other alcohol categories.”
Daniel Sciamma, MD of JTI in the UK, said: “By introducing a Minimum Excise Tax, the government will raise additional tax revenue, therefore we are disappointed that the above inflation duty escalator has not been removed. Of course, any tax policy needs to be supported by greater enforcement action to deal with the illegal trade in tobacco, which has the biggest impact on retailer and government revenues.”
Paul Martin, UK head of retail at KPMG, said: “For smaller businesses who were facing the prospect of sizable business rate hikes, the Chancellor’s efforts to relieve at least some of the pressure will be welcome, particularly by those pulling the perfect pint. For larger businesses however, the Budget won’t have softened the blow much at all. The £435m relief fund will see a cap of £50 per month for small businesses coming out of small business relief, as well as a £300 million fund for local authorities to provide discretionary relief for businesses. It remains to be seen how much of this will benefit retail specifically. As expected, the Chancellor pointed to a longer-term review of the revaluation process, but the growing use of digital channels were also earmarked to be included in the next review, and online retailers are likely to have shuddered at the thought.
“Business rates aside, for some time now retailers have been facing strong headwinds across the board. Contributing to the perfect storm have been multiple pressures including: the significant devaluation of the pound post-Brexit; the increase in national living wage, and the apprenticeship levy to name just a few.
“In order weather the storm, retailers big and small must remain agile in this changing and clearly touch political and economic environment. Whether Brexit or Budget, this has always been an industry geared towards survival of the fittest.”
National Farmers Union
NFU president Meurig Raymond said: “There were few measures in today’s Budget to help create an environment that supports profitable, progressive and competitive farm businesses. The Chancellor’s announcement on capping business rates increases will be welcome news to members with small diversified farming businesses. […] Many farmers will feel that this Budget was a missed opportunity, particularly that the Chancellor did not see fit to extend capital allowances as part of the Government’s productivity plans. Farming needs to invest to increase productivity so it can compete post-Brexit. Farming produces the raw ingredients for the UK’s largest manufacturing sector – food and drink – which employs nearly 4 million people and contributes £108 billion to the economy. For every £1 invested in farming, it contributes £7.40 back to the country’s economy; it’s time for the Chancellor and Government to fully recognise British farming’s value for money.”
Katie Vickery, regulatory law expert and partner at Osborne Clarke, said: “The announcement as part of the Spring Budget of enhancing the powers of regulators to pursue companies that mislead consumers should be the wake-up call that businesses need to make sure that their compliance systems are adequate to defend any challenge. The introduction of the Consumer Green Paper and the recent change in pricing and promotion guidance introduced in December is a clear sign that there will be more regulatory enforcement in this area. Consumer-facing businesses need to sharpen their focus particularly when the level fine is to be a “strong and effective deterrent” and may be the equivalent of 10% of a company’s annual turnover.”
Public Health England
Dr Alison Tedstone, chief nutritionist at PHE, said: “The sugar levy is already having an effect, with some manufacturers announcing cuts to sugar in their drinks. We’re working with the food industry to do the same across a range of other products too and some household brands have made similar announcements.There is a lot to do yet, but overall, we’re optimistic about cutting the nation’s sugar consumption and seeing health benefits as a result.”
R&D Tax & Grants
Director Justin Arnesen said: “The sugar tax has been hotly debated since its announcement last March, but now that the Government has confirmed the levy it should lead to a surge in investment in innovation over the next two years. Soft drink manufacturers will be seeking to achieve the same level of taste whilst reducing the sugar content of their drinks to below the taxable threshold.
“Despite lobbying, the sugar tax has been in the works for some time now, so it shouldn’t come as complete surprise to soft drink manufacturers. Although this levy will undoubtedly cost these businesses money, they should still be able to claim back a high proportion of what they spend on developing new soft drink products through the UK R&D tax incentive. The scope of the incentive is relatively broad for innovative companies, with costs for improving the performance of manufacturing equipment and methodologies, and even packaging developments, all potentially qualifying under the R&D tax incentive.”
Mike Coupe, group chief executive at Sainsbury’s, said: “Business rates are an analogue tax, not fit for the digital age. The UK needs wholesale reform of business taxation. We would ask the Government to carry out a root and branch review of business taxation to create a level playing field across all businesses, rather than penalise property-based companies.”
Scotch Whisky Association
Julie Hesketh-Laird, Scotch Whisky Association acting chief executive, said: “A nearly 4% duty rise and a 79% tax burden on a bottle of whisky is a major blow, reversing recent progress. Distillers will find it hard to understand why the Chancellor is penalising a strategically important British industry with this tax increase. At a time when government should be supporting a key home-grown sector, we face a damaging tax rise on top of the uncertainties of Brexit. Looking to the autumn Budget, we will be arguing strongly that it is time for a new approach to excise duty outside the constraints of EU excise law. The system is in need of a fundamental review and reform to make it fair and competitive.”
Mike Benner, MD of the Society of Independent Brewers (SIBA), said: “The £1000 reduction in business rates for pubs with a rateable value below £100,000 is welcome support for the sector, although much more needs to be done, but this contrasts sharply with the 2 pence increase on beer tax which is a blow for the millions of people who enjoy a pint of British beer in their local pub and also for Britain’s 1,800 small brewing businesses across the country. We called for local brewers and community pubs to be supported with a cut in beer duty to build confidence, enable investment and create jobs in light of increasing costs and uncertainty, but the Chancellor’s decision will be a setback.”
Phil Mullis, head of reatil and wholesale and partner at Wilkins Kennedy, said: “Business rates have been a sore point for a long time. The Chancellor has admitted that there is no appetite to abolish business rates, particularly when they make around £25bn for the Treasury every year. However, the Chancellor did say there is scope to review the revaluation process and consult on this before the next revaluation is due. Then again, saying is one thing, doing is another. The Chancellor has introduced a £1,000 relief to the pub trade, for those with a rateable value of £100,000 or less. Whilst the relief will be most welcome, it depends how much they have been increased in the first place to warrant the relief to be beneficial. There is still a long way to go.
”It was disappointing to see that there was absolutely no reference to how the Government plans to bring business rates in line with the discrepancy between those charged to bricks and mortar retailers and those to online. This is a major area in need of addressing, but first, there needs to be an urgent overhaul throughout.”
Wine & Spirit Trade Association
Miles Beale, chief executive of the Wine & Spirit Trade Association, said: “It is disappointing that the Chancellor has failed to support a great British industry. He has increased what were already excessive and unfairly high rates of duty for the UK’s wine and spirit consumers and businesses. Between Brexit’s impact on the pound and rising inflation the wine and spirit businesses face a tough trading landscape. This is a missed opportunity to back British business and help out struggling consumers.The added uncertainty of another Budget in 6 months’ time is unwelcome and will further undermine business – and consumer - confidence.”