Duty cut for small brewers proves a success

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Gordon Brown's cut in beer duty for small brewers is proving to be a success.Brewers' tax bills across the country are falling following the...

Gordon Brown's cut in beer duty for small brewers is proving to be a success.

Brewers' tax bills across the country are falling following the introduction of Progressive Beer Duty (PBD) in the Budget last April.

The cut applied only to those brewers who produce less than 30,000 hectolitres of beer a year.

Roger Catte, managing director of Wiltshire-based Moles brewery, said: "It's been a lifeline, and it's come just at the right time.

"Progressive beer duty has had a huge positive impact on the business. It's allowed us to invest in the business and has, without a doubt, given us extra breathing space."

And in Cumbria, community-owned Hesket Newmarket also gained from PBD. It helped to turn the brewery's £4,000 losses as a result of the foot and mouth epidemic into a £5,000 profit last year.

Brewer Mike Parker said: "The cut in duty allowed us to reduce prices to make our beers more competitive."

But brewers that missed out on the cut in duty because they exceeded the cut off point say they are being squeezed out of the market.

Paul Jeffries, production director at Hydes' brewery in Manchester, said the measures should have been introduced across the board.

"We are against PBD just applying to small breweries. As a family brewer we would obviously prefer to have this advantage too. We aren't big players in the marketplace and haven't benefited at all.

"If anything it's been harder for us, as the smaller micro breweries can now be a lot more aggressive on their pricing. We're being squeezed out."

Related articles:

Brewers slam Budget's 'misleading' duty claims (26 April 2002)

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