SIBA calls for 20% draught duty discount

By Gary Lloyd

- Last updated on GMT

Why does SIBA want draught beer discount rise from 5% to 20%?

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The Society of Independent Brewers (SIBA) has urged the Chancellor to expand the draught duty relief to 20% to help the ailing pubs and brewing sector.

Under changes set to come into effect on 1 August, draught pub products such as beer and cider will receive a 5% duty discount in a bid to encourage people to use pubs but SIBA says the discount must be as high as 20% if people are to be lured off the sofa to support the industry.

SIBA chief executive Andy Slee said: “The draught duty discount is a hugely positive move by the Government but in order to act as the lifeline for community pubs and small independent brewers it is intended to be, the Chancellor must go further and invest in this vital industry with a more generous 20% discount.”

Shot in the arm

He continued: “This would represent a real investment by Government in SME (small and medium-sized) businesses in communities all across the UK and provide a shot in the arm for a struggling hospitality sector.”

The trade body said Chancellor Jeremy Hunt is set to decide on duty rates that apply from 1 August in his Spring Budget on 15 March, which will present him with the chance to expand the draught duty relief from the £100m a year investment currently planned to £400m a year if the 20% rate is adopted.

Slee added: “Pubs and brewers pay far more than their fair share of tax. In fact, breweries are the most taxed part of the UK economy as a share of turnover and the expansion of the draught relief could be a huge help to thousands of small businesses.”

Helping independent breweries

He continued: “By supporting draught beer in pubs, the Chancellor is also helping the small independent breweries that supply them, improving sales and encouraging more people to enjoy a draught beer in their local.

“This is particularly important for fresh cask beer, which can only be purchased in pubs, the majority of which is produced on a small scale and often by local breweries.”

SIBA added the vast majority (80%) of the beer traditionally produced by small breweries is sold in local pubs within 40 miles of the brewery and that almost 400 pubs closed for good in 2022 in England and Wales while the number of pubs in the UK has fallen 25% since 2000. The UK also lost 160 active breweries during the pandemic and, in 2022, 80 small independent breweries closed for good.

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