Brewers unite over PBD concerns

Regional brewers are rallying together to renew their concerns over Progressive Beer Duty (PBD).

A group of nearly 20 brewers, including Adnams and Refresh UK (which owns the Wychwood Brewery) have joined together calling for the Treasury to change PBD to present a more level playing field.

They are lobbying the government ahead of March's budget and are writing to the Treasury calling for changes to the policy.

A group of 14 brewers similarly lobbied the Treasury last year calling for a review.

They claim that the government has got the levels wrong and is unfairly penalising brewers producing more than 5,000 hectolitres a year. It is also stifling the growth of successful microbrewers, they believe.

Stephen Pugh, finance director at Adnams, said: "In no way are we calling for the Treasury to get rid of PBD. But at its current level it creates a gross distortion."

Brewers operating at under the threshold receive £45 per barrel tax relief which actually exceeds the costs of brewing a barrel of beer - giving them profit even before the product has been sold.

This discourages them from expanding their business because once they produce more than 5,000 hectolitres their duty relief rate drops.

"This is not an anti-microbrewer issue," said Mr Pugh.

"It is a Treasury issue. PBD was introduced in 2002 as a political manoeuvre ahead of the World Cup. And they got it wrong."

However, the Society of Independent Brewers (SIBA), which represents smaller brewers, says it believes PBD is very effective.

Keith Bott, chairman of SIBA, said: "PBD is working well and having the desired effect. It should be under constant review. The scheme has been fantastically successful."

PBD was introduced in 2002 to try and encourage growth among Britain's small brewers.

However, the rise of the top limit in the duty level from 30,000 to 60,000 hectolitres in 2004 intensified criticism of the policy.