Calls for Prime Minister contenders to rule out SBR reductions

By Nikkie Thatcher

- Last updated on GMT

Demands made: brewers want Boris Johnson and Jeremy Hunt to positively reform Small Breweries’ Relief
Demands made: brewers want Boris Johnson and Jeremy Hunt to positively reform Small Breweries’ Relief
The Society of Independent Brewers (SIBA) has written to Boris Johnson and Jeremy Hunt to ask them to rule out reductions in Small Breweries’ Relief (SBR).

The trade body is also calling for the Conservative leadership contenders to back positive reform of SBR, which is currently being reviewed by the Treasury.

SBR aims to allow small brewers to pay a more proportional rate of duty on their beer, according to SIBA.

It also allows small brewing businesses to compete with global brewers that SIBA claims dominate the marketplace.

A brewer who makes up to 5,000hl (about 880,000 pints) of production per year pays 50% of the standard duty rate.

Above 5,000hl a year, the rate brewers pay in duty climbs steadily until they produce 60,000hl, at which point the full standard duty rate is applied.

More than three quarters (83%) of SIBA members said SBR was “extremely important” to their business and the rest agree it is “very important” (5%) or “important” (8%).

SIBA also claimed SBR was directly responsible for the ‘craft beer boom and is vital to the UK beer scene’.

SIBA chief executive James Calder said: “Breweries are incredibly important to local economies across the UK and politicians are rightly engaged, with around a third of MPs having visited their local brewery in the past 12 months.

“We’re now calling for the help of those same MPs, and the Tory leadership hopefuls to back British independent beer and tell the Treasury to commit to no reduction in relief for Britain’s independent brewers.

“SIBA is resolute that no small brewer should lose any duty relief as the result of reform because any reductions threaten jobs, investment and consumer choice, which is why SIBA will continue to defend SBR at current levels while lobbying for positive reform.”

Turbocharge brewing

SIBA chairman and owner of Roosters Brewery Ian Fozard said growing businesses through 5,000hl was incredibly hard.

He added: “We think the Treasury recognises this. The next Prime Minister should seriously consider adopting SIBA’s policy to turbocharge UK brewing while protecting the smallest brewing businesses.”

One brewer that said reductions in SBR would result in the closure of his business is Roo Stone, head brewer of Old Sawley Brew Co in Nottinghamshire.

He said: “We are a relatively new business trying to expand. Without SBR, I doubt I could continue employing people and, as a consequence, would probably have to close down as I couldn’t do it all myself.”

Head brewer of Amber Ales in Derbyshire Pete Hounsell echoed Stone’s comments and highlighted the importance of SBR.

He added: “SBR is vital to our business and the craft beer sector. Without it, we would not be able to trade and there would be virtually no small microbreweries left either.”

Shane Swindells from Cheshire Brewhouse said SBR was “vital” to keeping his brewery open and, should it be reduced, he said it would close his business overnight.

Marble Brewery’s Jan Rogers looked back on the positive impact SBR had on the Manchester-based business when it was introduced.

She said: “As a brewery that has brewed at under 5,000hl for the past 22 years, Marble definitely benefited from the introduction of SBR in 2002.

“It meant we were able to balance the books while championing cask beer and innovating in a changing product market.

“The reduction of SBR for producers under 5,000hl will lead to the return of a monopoly-style market with a loss of many small businesses such as ours.”

Crucial to business

SBR helped create jobs for nine full-time members of staff at Hackney Brewery in London and it helped support the local community.

Hackney’s Peter Hills said: “SBR is crucial to my business. We founded the brewery in 2011 and have grown the business over the past eight years, creating jobs for nine full-time, tax-paying, local staff.

“We use SBR to improve working conditions for our staff and to run a socially responsible brewery, including being a London living wage employer.”

SBR should continue to serve small breweries as it always has, according to Nottinghamshire’s Lincoln Green Brewery MD Anthony Hughes.

He added: “SBR isn’t broken – far from it – it is serving to support small brewers overcome the diseconomies of scale and to compete in a market dominated by large breweries.

“Together, small brewers have created the most exciting and innovative beer market the country has ever known.”

Andy Mansell from Red Cat Brewing in Hampshire said small breweries of the UK were a huge part of the local and national economy.

He added: “Without SBR, many – if not most – would be shut. Small breweries make huge payments to the Government and economy in many ways, one being a higher number of staff per hectolitre of beer produced than big brewers for a start.

“With duty being one of the biggest prices on a pint of beer should it rise then small breweries will be closing their doors, which will have a lasting effect on the wider economy.”

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