OPINION: Why draught duty could be the best way to back pubs

Andy-Slee-on-partnering-with-Labour-Gov-on-business-rates.jpg
Opinion: SIBA boss Andy Slee explores why draught duty could be the best way to back pubs

For all the diversification we have seen in pubs over the last generation, I am privileged to represent the category that is most synonymous with them – beer.

  • Want to find out more about the trends, challenges and opportunities shaping the drinks market? Book your ticket to Drink Tank here now – the new meeting place for the UK drinks industry on 10 November.

To that end, it was a pleasure to see Indie Beer’s Beer Pub of the Year crowned as The Morning Advertiser’s Great British Pub Awards’ overall winner.

George and Louise Greenaway are brewers and publicans at the Tamworth Tap, at the heart of the community who they clearly hold dear.

I was moved by George’s acceptance speech in which he said he wanted to spend his year advocating for our sector. Good on him – we need as many articulate publicans with his passion and desire as we can to help make our case.

Join our WhatsApp channel: The Morning Round-Up

Get the biggest pub trade stories straight to your phone. Listen to our one-minute daily news briefing and receive breaking news, exclusives and sector updates throughout the day. Remember to turn notifications on in the top right corner!

Join the channel here.

First up, we are just weeks away from John Healey’s first Budget, so what can we hope for and expect?

It is significant Healey and Prime Minister Andy Burnham talk about our sector fondly. Community pubs and brewers play a role in bringing Britian’s fractured communities together at a time when they need it most.

Community would miss loss of pub

They offer a sense of local identity that a branded restaurant or burger chain can never offer, as well as all of the economic benefits of the young people they employ and local suppliers they support.

A recent YouGov poll commissioned by SIBA found more people would miss the last pub in their community than they would a butcher’s, baker or church – only a post office closure would hurt their community more.

Over the summer, much of the discourse has been about VAT and I admire the way Tom Kerridge grabbed airtime to highlight our challenges with #VATsTheProblem.

It’s a huge ask, especially with defence and social care so high on the national agenda but if delivered is unlikely to stretch to alcohol. It didn’t during Covid so why would it now?

If that’s the case, those hard-pressed community pubs are less likely to benefit from a VAT cut than the local Starbucks. A chain I’ve yet to hear calls for taxpayers help to support.

Wish to increase duty differential to 30%

So how to help the community pub, bar or taproom? The PM’s announcement on business rates was more than welcome, with the promise of more to follow. Enough has already been said on that.

We pay beer duty at 1,000% of that in Germany but now have a mechanism to reduce this in a targeted way to help pubs and brewers. There is a 14% differential between draught beer sold in pubs and packaged beer in a measure successfully lobbied for by independent brewers.

In a piece of research by Centre for Economic & Business Research (CEBR) for SIBA, draught duty relief has delivered what it set out to, with volume shift from off to on-trade for the first time in years.

Brewers – big and small – believe this differential should be increased to 30% in a measure CEBR said will create 3,400 community-based jobs and provide a £137m boost to pubs and brewers across every postcode in the land.

Good luck to Tom in his pursuit of a VAT cut but, as a backstop in business rates and draught beer duty, we have two ways of targeting Government help to where the voting public will most appreciate it.

I am sure, along with George Greenaway, that you will all toast that with a local independent beer.