Brewers hope for duty announcement in Budget speech

Chancellor Gordon Brown is widely expected to announce the introduction of progressive beer duty in his Budget speech later this month.

A sliding scale, promised in last autumn's pre-Budget statement, would be welcomed by small brewers who believe it could help them compete with the big players.

Progressive duty is likely to be calculated on the basis of barrelage with a percentage discount for brewers producing less than, for example, 50 barrels per week.

The discount would then get smaller up to an agreed maximum, after which the full duty would be applied.

The trade is also keen to hear what effect, if any, the report on duty written by European commissioner Fritz Bolkestein has had.

Mr Bolkestein, who criticised UK Customs officers for being "heavy-handed", recommended freezing duty in member states with high duty rates - such as Britain - while increasing duty in those with low duty rates in line with inflation.

The trade welcomed Mr Bolkestein's report, which also said harmonising beer duty across Europe was the only way to stamp out smuggling.

Mark Hastings, spokesman for the British Beer and Pub Association, said: "It will be interesting to see what impact the Bolkestein report has had on Treasury thinking."

The Wine and Spirit Association said it wants the Chancellor to cut duty on wine and spirits by four per cent to bring Britain into line with Europe as well as removing the Victorian tax surcharge of 60p per bottle of sparkling wine.

It has also asked for small wineries to be given the same consideration for reduced duty as small brewers in an attempt to encourage English and Welsh vineyards.