It is clear the brewing and pub sector has failed to win the argument for material help.
The fact brewers pay 33% to 40% of their turnover in tax while online bookmakers and retailers pay under 10% is a national scandal.
I’m not sure about you but I am fed up of paying Amazon’s share of what should be an equitable tax regime. We still have a taxation system for the analogue era in the digital age.
It is easy to blame successive Governments for this and the recent absence of hospitality from the new Industrial Strategy... we also need to look at ourselves.
As an industry, we failed to make the case that 1m jobs, half of which are with under-24s, raising £100m per annum for charity, the soft benefits pubs and breweries bring to local communities, topped off by our £18bn tax contribution to the exchequer, warranted a place at the top table.
Crucial role
Giving evidence to a recent All-Party Parliamentary Beer Group enquiry, it stuck me once again what a crucial role brewing and hospitality can play in the pursuit of national economic growth.
If the Government wants bottom-up growth, where better for them to invest than in the tens of thousands of SME pub and brewing businesses that bring communities together and employ thousands both directly and in local supply chains?
But there is a further hidden consequence of this unfair treatment.
Demand for independently brewed beer is strong with volumes back at pre-pandemic levels in a beer market that remains resolutely in the doldrums. The call for independently brewed cask beer also remains strong.
Despite an average production growth of 10% last year, we have 135 fewer brewers than a year ago. Just as worryingly, only 20% of independent brewers invested in their business in the past 12 months to take advantage of this growth in demand.
Speaking to brewers, it is clear to see why. Conventional lenders have become allergic to hospitality. Profitable, professionally run brewers with positive track records going back decades have had overdraft facilities withdrawn with the bar for loans higher than they have ever been.
Reclassify as manufacturing
One brewer of 25 years standing was told they had “the best credit rating in their SME business manager portfolio,” but couldn’t be considered for a loan because they operate in hospitality.
Another was told by their bank of nearly 30 years they could only be considered for a loan if they reclassified themselves away from hospitality into manufacturing.
A third, well-known emerging brewer with consecutive double-digit turnover and profit growth over a three-year period struggles to find a backer to help him invest and create local jobs.
Back to where I started. SIBA, together with industry colleagues need to redouble our efforts to have our wonderful sector classified as ‘good’ in the eyes of Government and worthy of their material support.
With their support, those in charge of financing growth British SMEs may wake up and realise the huge opportunity they are missing.
