A NEW Northwich brewery has spoken up about changes in beer duty which could be devastating for small, independent producers.
Since 2002, Small Brewers’ Relief has helped microbreweries get set up, enter the market and compete against bigger businesses. It’s widely regarded as being the key to the UK’s diverse modern beer scene.
It offers a 50 per cent reduction in duty for breweries that produce up to 5,000 hectolitres of beer a year – about 879,877 pints. By way of comparison, big regional beer producers like Stockport’s Robinsons Brewery has a capacity of 57,000 hectolitres a year.
But the Treasury is now considering a proposal put forward by a group of breweries called the Small Brewers’ Duty Reform Coalition to reduce this threshold from 5,000 hectolitres to 2,100 hectolitres by 2022.
Opponents say it could cost at least 150 breweries tens of thousands and inhibit future start-ups in an already hazardous economic climate.
In July, friends Simon Appleton, of Little Leigh, and Chris Birtwistle, of Castle, announced their long-term plans to create their home brews on a commercial scale.
As Hush Brewer Brewing Co, the pair are crafting a range of beers in Simon’s back garden while looking for larger premises in which to upscale their brewery.
While they fortunate that the Government’s proposals for the industry will not directly impact upon their current operation, they are only too mindful how it will affect the number of small scale of brewers that can enter the market.
Chris said: “We view the proposed changes to Small Brewers Duty Relief as likely to damage the ecosystem of brewers in the UK. The introduction of the relief has enabled more brewers to enter the market. This in turn has driven up the quality and creativity of the beer available.
“It reflects the lower economies of scale available to smaller brewers. Without this relief many great breweries may not have been able to come to the market. This relief has been in place to encourage diversity and choice. The impact of the changes is particularly difficult to guess as this has been half announced.
“The Government has announced the intention to lower the threshold, following the lobbying of many larger breweries, without the supporting detail of what the new rates will look like.
“This heaps further uncertainty on small breweries at a time when they are already coping with the impact of the current pandemic.”
Chris adds that as a new entrant into this market Hush Brewing Co is fortunate that its initial plans don't come yet reach the production level required to be hit by the changes, but says it does make an impact on their hopes of growing and explaining.
He added: “For us this means we don't have to make changes to our initial business model, but this will mean that we seriously have to assess if our longer-term goals are now realistic.
“Many businesses will have to do the same but some now find themselves in the firing line where they have achieved good growth but will now be hit with an, as yet, unknown tax burden in a relatively short time when economic uncertainty surrounds the economy.”
Supporters of the reform say the duty discount discourages growth above a certain level and has created market distortion which threatens the long-term future of the British brewing industry.
They have also said the changes will create a level playing field.
But a petition has been launched saying the changes threaten closures, innovation, competition, jobs, investment and consumer choice.
If you want to sign the petition visit petition.parliament.uk/petitions/334066
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