Craft brewers back VAT cut to 5%

By Ewan Turney

- Last updated on GMT

Related tags: Progressive beer duty, Beer, Cask ale, Siba

Cask ale: local brewers are thriving
Cask ale: local brewers are thriving
Britain's craft brewers have thrown their weight behind the MA's campaign to cut VAT to 5% for the hospitality sector. The call came as the Society...

Britain's craft brewers have thrown their weight behind the MA's campaign to cut VAT to 5% for the hospitality sector.

The call came as the Society of Independent Brewers (SIBA) revealed that beer volumes from micro-brewers outstripped the overall market — up 8.8% against a market down 3.9% in 2010. New brewers contributed a 1.3% increase, meaning like-for-like volumes were up 7.5%.

While SIBA praised the role of Progressive Beer Duty (PBD), which offers a reduction of 50% on duty to brewers producing less than 60,000 hectolitres a year, it raised concerns over the continuing rise in duty and VAT.

"Local brewers are just the kind of business this Government has been saying it wants to see succeed: they create jobs for local people, contribute to the local and wider British economy by using home-grown ingredients such as barley, and have impeccable environmental credentials," said chief executive Julian Grocock.

"It is time for the Government to become more 'joined up' in its approach to taxation across the brewing and pubs industries."

Progressive Beer Duty

Grocock pleaded for the Government to keep PBD in place, claiming any removal would "destroy" the sector. Over 60% of SIBA members believe their brewery would fail without PBD.

"While PBD has without doubt helped many SIBA brewers to grow, the current tax regime is decimating our main route to market — the great British pub. "Introducing a lower VAT rate across the hospitality sector, and scrapping the duty escalator, would help to bring customers back to into pubs — helping to keep them, and the local breweries, in business and providing jobs at a time when they are sorely needed."

Passion

Sales through SIBA's Direct Delivery Service, which allows local brewers to deliver direct to tied pubs, grew 9.8% last year to £10.8m. A total of 2,127 pubs ordered through DDS last year — a 13.8% increase with 94% of deliveries being made to within 40 miles of the brewery.

Last year, SIBA members produced 2,500 cask beer brands, 3,500 sesonal ales and 1,750 bottled ales with cask ale accounting for 80% of all production.

"It's hard to think of another industry where pride and passion for a product, coupled with consumer demand and appropriate fiscal support from government, have resulted in such a marked transformation in its fortunes.

"We urge the Government to think long and hard before making any decisions which could jeopardise the prospects for our young, vibrant sector and of the pubs upon which it depends."

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Related topics: Legislation

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