What is more encouraging is a long overdue commitment to make sure that online businesses pay their fair share in the UK whether Donald Trump likes it or not.
That we pay tax at many times the rate of online businesses like Amazon is simply unfair. For the economic prosperity of the nation, it needs to be addressed.
Announcements like the cut in pub business rates don’t happen by chance. They come as a result of conversations with MPs and ministers by brewers, publicans, trade associations and pubgoers across the land.
Talking of pubgoers, among the hullaballoo, you may have missed a recently published beer report written by the Campaign for Real Ale (CAMRA) – Europe’s largest single-issue consumer group.
No sector can afford to dismiss the people who ultimately pay its wages but, from what I hear, the report has ruffled a few industry feathers.
I thought I would share the Society of Independent Brewers & Associates’ (SIBA) perspective on the challenges it sets out.
It is beyond dispute that our beer market is in a parlous state. In a generation, the UK beer market has halved and yet the UK still sees among the biggest year-on-year beer volume declines in Europe. Something is amiss.
CAMRA makes some hard-hitting points on the causes around taxation, transparency and small brewers’ access to market so let’s take each in turn.
Taxation
Germany has a brewing industry that sits at the heart of its national identity and is a source of real pride. Its enshrined ‘purity laws’ are the envy of brewers worldwide. Germany takes brewing beer seriously and its government allows the sector to thrive.
In the UK, we pay beer duty at 1,000% of the German rate. Read that again slowly and let it sink in.
Beer remains Britain’s national drink, but it, alongside the rest of hospitality, is still being taxed to death. The Chancellor has a clear opportunity to widen the beer duty differential between packaged and draught beer to 30%, giving brewers and pubs more of a fighting chance. SIBA will be lobbying hard for this in the lead up to the Budget.
Transparency of beer branding and ownership
I recently read a German retailer had commissioned a copy of a Spanish-inspired, British-brewed beer to be brewed in Spain and shipped back to Britain for sale in its stores. What contortions the market puts itself through!
Add to that the confusion caused by formerly independent British brewers now owned by global giants and the market sometimes feels as transparent as a FIFA disciplinary hearing!
What other food and drink category thrives by turning its back on its British heritage?
Giving beer drinkers the information they need to support independent British beer is at the heart of SIBA’s Indie Beer campaign.
Support from our members has been almost unanimous and off-trade results have been outstanding. In the past year, the ‘indie craft’ category has performed 8.7% ahead of the total beer market and further ahead still of globally owned ‘craft’ beer. Drinkers are engaged; the only pity is that I am reporting off-trade progress to an on-trade audience.
Small brewers’ access to market
CAMRA’s final challenge asks why independent beers are not more present in pubs and bars across the UK. For SIBA and I, this is not a challenge to any pub-operating model including the tie. It is about how well-recognised global brands can sit alongside local beers in a ‘1+1=3 relationship’.
Greater choice makes a pub more attractive to a wider range of customers, which means more income for hard-pressed pubs. If anyone reading this sees that as a threat, it is not. I find it frustrating that off-trade retailers such as Waitrose seem quicker to exploit the opportunity than many in the on-trade.
How many people, bored of seeing the same beers on the bar, stayed at home during the World Cup so they could drink their favourite beer? I bet it is more than you think.
The Government announced a review into greater access for independent brewers almost two years ago. Independent brewers, publicans and consumers have waited long enough. The new Government should publish its findings and set out how it intends deliver on its objectives.
From all that I’ve seen over time in the industry, there’s a significant proportion of beer drinkers who don’t give a damn about any of this. By the same token, there is a sizeable minority who do. And those who do care passionately – whether it is CAMRA members or those keen on locally produced stouts, lagers and more niche beer styles.
If you have not read CAMRA’s report, spend a few minutes doing so. It is a consumer group setting challenges for an industry it cares passionately about.
Like me, you probably won’t agree with all of it, but it certainly offers food for thought. Promise me this – you read it over a pint from your local independent brewer and raise a glass to a more understanding Government.
