Brewers slam Budget's 'misleading' duty claims

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Some brewers have been forced to issue statements to their customers telling them they will not get 14p off a pint, after the government's...

Some brewers have been forced to issue statements to their customers telling them they will not get 14p off a pint, after the government's "misleading" Budget.

Surrey-based Hogs Back Brewery is among those that have hit out at what they see as Chancellor Gordon Brown's "misleading statement on a reduction in the price of a pint of beer".

Mr Brown said he would be cutting duty for small brewers by "the equivalent of 14p a pint, in time for the World Cup". But in fact the cut only affects very small breweries and will most likely not be passed on to the consumer.

Hogs Back's Dick Powell said many of the licensees he had spoken to had told him their customers were expecting a 14p reduction in the price of their pints.

The company has now issued a statement to its customers explaining how the new duty rates will work and apologising that any reduction will not necessarily mean beer costs less.

The statement said Mr Brown's Budget speech was "grossly misleading" because the cut applies only to the smallest brewers, while others will have their duty calculated on a sliding scale. Hogs Back is not the only brewer to criticise the government's announcement.

A spokesman for Hook Norton Brewery in Oxfordshire said it greeted the Budget with "dismay" because the ceiling for qualifying for the cut was set so low, at 18,330 barrels a year.

"This will not benefit many of this country's smaller brewers and, indeed, is likely to have a negative effect on many," he said. He added that some might even choose to cut production in order to qualify for the cut.

Henley on Thames brewer Brakspear agreed and said the changes were "the worst possible news for small independent brewers".

Chief executive Jim Burrows said: "Capping the concession where Mr Brown has, at 18,300 barrels, rather than the higher 122,205 barrels European limit, will seriously damage a significant number of historic British regional brewers.

"New smaller microbreweries will soon have a tax funded cost advantage to fuel a new price war for the vital freetrade and on which the survival of brewers like Brakspear depend."

The statement from Hogs Back Brewery:

"In his Budget speech Gordon Brown, Chancellor of the Exchequer, stated that beer duty relief measures for small breweries would result in a reduction of 14p per pint of beer.

"We would like to point out that we consider this statement to be grossly misleading as this figure only applies to the smallest of breweries with a production of around 30 barrels per week or less. To put this in perspective, it amounts to less than two pints in every million pints sold in this country.

"We feel very strongly that this misleading Budget statement has led both publicans and their customers to expect a price reduction of 14p per pint. This is totally untrue.

"May we take this opportunity to apologise on behalf of Gordon Brown for the obvious confusion his statement has caused."


We asked: have any of your customers demanded cheaper beer since the Budget? This is how you voted:
Yes:​ 80 votes (45 per cent)
No:​ 99 votes (55 per cent)

More on the Budget:

We investigate how Gordon Brown's 14p cut in duty for small brewers, announced in the Budget, will affect the trade. Read on...

Chancellor accused of "conning" beer drinkers (18 April 2002)

Small businesses boost from red tape cuts (18 April 2002)

PPSs hit by 65 per cent duty rise (18 April 2002)

Responses from the trade (18 April 2002)

Related topics Legislation

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