Brewers fearful of beer duty hike

Brewers are warning of a "perfect storm" for brewing if the government increases beer duty in the next Budget.

A rise in duty, brewing chiefs today told MPs at the traditional pre-Budget briefing to the All-Party Parliamentary Beer Group, would be the final straw for an industry that is already facing massive price hikes for raw materials and energy.

Keith Bott head of Titanic Brewery, representing the Society of Independent Brewers said the price of malting barley would in January increase by £135 a tonne and that the same could be expected for hop prices.

"We genuinely believe we are facing the perfect storm. A higher duty rate will continue us on that path and will create an even greater gap between on and off-trade."

Leading the Budget submission to the Treasury next year will be Jonathan Neame, chief executive of Shepherd Neame and he told MPs the industry would be calling for a freeze in the level of beer duty - something which he believes cannot be put off any longer. "The time to act for beer and pubs is now," he said "There is no time to lose."

Mr Neame said the rising level in beer duty over the last 10 years has virtually bled the industry dry - meaning the Treasury was not even making the money from the tax it expected to

"In pure economic terms the industry has nothing left to give," he said. "We have reached a stage of revenue maximisation with regards to duty. The Treasury is now actually receiving far less from beer duty than it has projected."

Also speaking at the meeting was Paul Hegarty, director of communications for Coors Brewers, and he questioned the lower duty level for cider, which undermined beer's place in the market. "The pressure on the industry is huge and many of us find it difficult to understand why the government is taxing beer in favour of other categories," he said.