Alcohol duty review appreciated but calls made for further support

By Nikkie Thatcher

- Last updated on GMT

Industry reply: trade bodies have responded to the Government's announcement on alcohol duty
Industry reply: trade bodies have responded to the Government's announcement on alcohol duty

Related tags: Beer, Alcohol, Tax, Legislation

The Government’s announcement that it will be launching a review into alcohol duty has been met with optimism from trade bodies alongside calls for more help for the beer and pub sectors to bounce back from the coronavirus crisis.

The British Beer & Pub Association (BBPA) welcomed confirmation that the wider alcohol duty review is expected in September.

BBPA chief executive Emma McClarkin said: “We will be responding to the review to highlight the case for further support for brewing and pubs for what is a world-renowned British industry, supporting 900,000 jobs, contributing £23bn to the economy and playing a key role in communities throughout the UK.

“Now we have left the EU, we have the opportunity to level the playing field compared with other major beer producing countries – especially as we pay 11 times more beer duty than Germany or Spain.”

Campaign for Real Ale national chairman Nik Antona hailed the announcement as a “fantastic opportunity”.

He said: “This review into how alcohol can be taxed more fairly is a fantastic opportunity for the Government to save our pubs by introducing a lower rate of duty on draught beer with savings passed on to pubs and consumers.

“A preferential rate of duty on draught beer is a radical proposal that will really help by supporting and encouraging drinking in the supervised setting of the local pub.

“This will also create and sustain jobs and level the playing field between pubs and cheap supermarket alcohol.”

Duty regime

Society of Independent Brewers (SIBA) labelled the forthcoming alcohol review as a “long-awaited opportunity to fully assess and address the inconsistencies within the duty system”.

Chief executive James Calder added: “Such as why global companies can pay a lower rate of duty on cider than the smallest independent brewer does on equivalent strength beer.

“We look forward to working with the Treasury to consider ways in which the system can be improved to make it easier for small companies to do their tax returns and ensure a fit and modern duty regime can continue to support our small independent brewers.”

However, the Government has also decided to reduce the threshold Small Breweries’ Duty Relief from 5,000hl of annual production to 2,100hl – a move that has been condemned by SIBA.

Calder said: “SIBA has consistently argued no brewery should lose any relief as the result of any reform.

“This position is now more important then ever, given the UK’s small independent brewers have not received the same level of support as the wider hospitality sector during the Covid-19 lockdown.

“Brewers have not been eligible for the business rates holiday or the £25,000 cash grants offered to the retail sector, including to many pubs.

“The minister confirmed details on the new scheme will be published as soon as possible but without this detail, we are unable to evaluate accurately, who will win and who will lose, and by how much."

Fine details

Calder added: “What we do know is there are about 150 breweries in the UK who, pre-Covid, sat between 2,100hl and 5,000hl of production volume, who will under the proposals announced, see the beer duty they pay go up.

“The Treasury has said a ‘technical consultation will be brought forward in the autumn’ with the intention of agreeing the fine details of this reform.

“It is important independent brewing comes together and lobbies the Treasury to ensure they are aware of the full consequences of their proposals.”

BBPA’s McClarkin welcomed the announcement on Small Breweries’ Relief and said the changes look to develop the success of the scheme.

She added: “Following an extensive review, we welcome the Government’s continued commitment to our sector with the announcement on Small Breweries’ Relief.

“Now worth £75m per year to small brewers, the changes announced aim to build on the success of the scheme.

“We hope the measures announced will support growth among brewers of all sizes. It is critical brewers of all sizes now join forces to campaign for a significant reduction in the overall UK beer duty rate, which is hindering the recovery and future of our great industry.”

Related topics: Legislation

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