Monday, 25 February 2013

Want Some Serious Statistics?

I've been busy on various beery things recently, but during this I stumbled across a very interesting document snappily called The Contribution of Beer to the European Economy. It gives a very detailed report of brewing activity in 31 different European countries. Ever wanted to know what's what in the Turkish, Slovenian or Luxembourg brewing industry? Of course you have. Who hasn't? Well it is all here in this lovely document. All 289 pages of it.

There is lots of interesting stuff like 2 million jobs attributed to the sale and production of beer, loads and loads of tables if you like that sort of thing and more stats than you could shake a stick at. There is also a little summary which won't surprise you.
  •  Decreasing consumption per capita; this trend started a number of years ago and is expected to continue.
  •  Consumers buying less premium brands of beer. 
  •  Relatively more beer being consumed at home instead of in bars or restaurants, the result being fewer jobs, less value added and lower government revenues being generated by each litre of beer consumed in the EU. 
  • Increasing tax burden, especially consumer taxes which have increased in many Member States, and this trend will probably continue for the foreseeable future. Higher taxes on beer lead to higher prices, and reduces beer consumption particularly in the hospitality sector, strengthening the trend for consumption of beer in the home.
Once again this is brought to you as a public service.You can read the report here.


RedNev said...

It's exactly what beer bloggers have been suggesting for years. It's also demonstrates how raising taxes even higher will lead to diminishing returns.

Anonymous said...

RedNev sounding like a Tory there.

Cooking Lager said...

It's quite a bit to wade through that, innit?

You can criticise it on a number of levels. Firstly it does not take in to account opportunity costs & customer utility. What I mean by that is that whilst a beer in a bar may be a positive contributor in the economy and have more added value (service) than a beer from a shop it is not necessarily economically negative overall if people opt to drink less beer.

If I find a greater utility in doing something else with my money, buying books or anything else say, then the economic benefits are transferred to an area of the economy that has a greater utility. It has a greater utility because it is a free choice for me to spend less on beer and more on something else.

So to conclude that we would enjoy an economic miracle if we banned Tesco from selling beer and gave people the choice of spending the evening in a pub or a lonely cold bare room with no books or telly is false.

It may be sad for those that enjoy pubs or bars to realise that well, you are in a minority, but the anti-tesco campaigns are not really going to make people want to use bars more.

Tandleman said...

I'll be looking for your help on that subject soon. Minimum pricing that is. All will be revealed soon.

Curmudgeon said...

I thought premium beers were gaining market share albeit within an overall declining market.

Cooking Lager said...

Can I ask a semi serious question of Nev, who I take to be of the left of politics. It is not a dig, I promise.

I agree that high taxes are having an effect. Lower tax rates may even increase revenue in what I believe is called the laffer curve. Though this study is Europe wide and I am unsure beer tax is an issue elsewhere.

Why do people of the left accept the laffer curve for taxes they do not like (beer tax) but dispute it as rubbish for income & business taxes?

Tandleman said...

Shall I postulate two things here? One because it suits them and someone has to pay the bills.

Two because they are often economically illiterate. Not Nev obviously. He's just an old posh leftie a la Tony Benn (-:

Curmudgeon said...

I read somewhere recently that half of all political arguments would disappear if politicians stopped using the tax system as a means of trying to change behaviour.

Cooking Lager said...

The problem with that one Mudge is that the tax system does change behaviour. Would smoking be in such decline on the basis of a few government adverts or because it gets ever more unaffordable? Are we seeing changes in car use & car choice because people love green politics or because petrol is expensive? Have a look at the stats for new company formations. They rocketed as a direct result of Gordon’s 50p tax trap he left for the Tories. This wasn’t a surge in entrepreneurship; it was a bunch of middle class types deciding to set up tax avoiding vehicles for disguised employment. Changes in the tax system do change behaviour. Occasionally those changes are even intended, though most of the time they aren’t.

Phil said...

Cookie - the simple answer would be that purchase tax isn't (just) a tax Nev doesn't like, but a tax which acts directly on pricing and consequently could be expected to have direct economic effects. And in fact, where the purchase tax known as beer duty is concerned, there's data to suggest that Laffer curve effects do exist, and that we're on the down curve. Where income tax is concerned, the mechanism whereby higher taxation would lead to lower effort is a lot less obvious and a lot less well-attested, and it's not at all clear whether we're on the down side of the curve or not.