Uncategorised

The Small Brewers Duty Reform Coalition

There are a group of big brewers out there that will quite happily take our livelihoods away…

We really love what we do and we want to get to a position of actually taking a real wage out of the company, paying our staff more money and hopefully growing our little business to a sustainable level.

So lets not let them screw us over!

Here are their suggestions for Beer Duty Reform with my thoughts below.

We recommend that the maximum duty relief is maintained at 50% for ‘micro’ brewers,
defined as being up to 1,000 hls.

The current Small Brewers Relief (SBR) is set at 5000 Hectolitres (hls) and these big brewers want to cut that back to 1000 hls, this would mean that the vast majority of Small Independent brewers would have to start paying a higher rate of Beer Duty. In theory this would be passed onto the customer with a price increase. This may result in a lot of us small breweries not being able to compete on price with the bigger breweries because we do not have the economies of scale, worse still it might see a load of small brewers being pushed out of the market and closing their businesses (much to the glee of the Big brewers who will get a bigger market share than what they already have!).

We also recommend the upper limit for SBR relief be raised from 60,000 hls to 200,000 hls

Now this one is a bit more tricky, if the Big brewers are sensible they could simply make more money out of this, though if the same things happens that happened with SBR any releif from the burden of Beer Duty will mean the Big brewers are able to undercut small brewers pushing them out of the market and, yeah you guessed it, out of business.

Above 1,000 hls, the rate of relief would be adjusted in a phased approach to be more
closely aligned to the diseconomy of scale curve.

They cite some graph at this point showing us how bad they have it and they just can’t make any money because they are so big and that all those little guys are raking in the money because of thier 50% Beer Duty Relief…. What the actual case is… They have their graph arse-backwards, THEY are the ones racking in the cash and posting healthy profits each year while the small guys like us are managing to pay the mortgage, pay the household bills and struggle with things like high business rates!

Export sales should be excluded from the brewer’s volume for duty purposes until the
point that UK plus export sales exceed 200,000 hls.

This one is actually very sensible in my opinion, why should the volume of beer for export be levied against brewers when the beer is to be consumed outside the UK. Never mind a limit, just don’t include any exported volume in production figures that have a bearing on Beer Duty.

We recommend a further adjustment so small brewers can merge with other small
brewers and their respective duty reliefs are combined and phased down over 3 years on a
straight line basis until they are paying the rate relevant to the combined volume.

A market ripe for buying out small brewers then?? Other than that I don’t feel I can comment on this point.

We recommend that there is a further review of SBR in 3 years.

Well you would want a clause in so if it wasn’t going your way you get to try again! We have a yearly review of this anyway, its called The Budget and its where the chancellor puts Beer duty up! Seriously though, things should be reviewed but ALL brewers should be given a say and not just the apathetic SIBA members so a real market picture can be used to guide change.

We suggest consideration is given to converting SBR into an actual cash figure

To be honest, I do not understand this, even reading the notes for it… anyone?

We recommend that HMRC consider whether any improvements might be necessary in
the current inspection regime to ensure full compliance within any revisions to the SBR
scheme.

We would welcome industry wide inspection, brewers, pubs, bars, wholesalers etc as it would help keep our industry above board, you hear tales about how so-en-so sells beer under the radar to thingy-ma-jig’s Pub to save on VAT or something.

Things we need to address in our industry are:

  • Increase the duty burden on Multinational brewers who undercut everyone and sell beer into the UK market which causes price distortion, basically this screws over all brewers in the UK other than the Multinationals.
  • Contract brewing should have beer duty charged to the brewer who contracts out production at their rate.
  • No duty calculation from exported volumes.
  • Always help the small brewers who lack the economy of scale.
  • Or… just scrap beer duty and raise Govt money by other means.
  • We need CAMRA & SIBA to support Small Brewers with all their might.
  • If SIBA is to stay relevant to brewers it needs to be FULLY democratic in its decisions and choices and engage the silent masses of members & UK brewers.

I can see now that beating SIBA on their recent AGM vote to allow bigger brewers to join SIBA was a good thing, if the big brewers take control of SIBA you can wave goodbye to any Small Brewers Relief, wave goodbye small and local, wave goodbye to independence, wave goodbye to breweries and beers, wave goodbye to consumer choice.

I’ve been struggling with shouting about this subject online, I feel I can rant about things at times though only through wanting to ensure our industry is in a good environment. I also don’t want to look like a dick to people I admire, so I needed to find a balance yet still be able to make my thoughts public on this brewing industry that we all love.

#SBDRC

…Stay small …Shop local.

 

Further Reading:
https://drive.google.com/file/d/1eIgtWaQpHuhcdB5Ra3I21uUoKqxTsaeJ/view
http://cask-marque.co.uk/cask-matters/small-breweries-reform-coalition/
https://drive.google.com/file/d/1lgDyqQA4IKKRvu0pwlS8hQcfv2jgHgQ8/view