British breweries welcome draft beer tax cuts and question their implications

Pubs and beer producers welcomed the announcement of a “draft bailout” on the prime minister’s budget, but some suspected that it would have a significant impact on the sector.

Rishi Sunak told lawmakers in a budget speech that tariffs on draft beer and cider would be reduced by 5%, taking one to three pints in the pub.

As part of a major overhaul of the UK alcohol tax system, taxes on sparkling wine and some low-strength products will also be reduced.

Snacks also said tariff increases on spirits such as Scotch whiskey, wine, cider and beer would be canceled early at night. This alone would result in a tax cut equivalent to £ 3 billion.

The Treasury said it would reduce major tariff rates from 15 to 6 as part of the reforms that came into effect in February 2023.

Brewers welcomed the announcement as a boost to an industry struggling with a pandemic, but some said it wasn’t going well enough.

Epoch Times Photo
Men drink beer in a pub in Liverpool city center before bars, gyms and clubs are closed in Liverpool, England on October 13, 2020. (Christopher Furlong / Getty Images)

Nick Mackenzie, CEO of Green King, the UK’s largest pub and brewery, said:

“Creating draft rates and simplifying the mandatory system is positive news for the 2,700 pubs and communities servicing across the UK.”

3 pence makes no difference at the bar

Tom Jenkinson, a business partner at Chiltern Brewery, a family-owned brewery based in Alice Burley, said the pullpint tax cuts are unlikely to make a “big difference.”

“Heading is getting a lot of attention because it’s a reduction,” he told PA news agency.

“The question is what that leads to. 3p doesn’t make a big difference in bars. 50p may be enough. I think 3p gets lost in noise.

“If it’s 5% off, it’s not a lot of money to be honest … it’s a step in the right direction, but I don’t know how much it will happen to the Panther behind the bar.”

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Wetherspoons pub staff in northern London will clean the glasses on June 24, 2020 in preparation for the pub to reopen early next month. (TolgaAkmen / AFP via Getty Images)

That sentiment was repeated by Tim Coombes, co-owner of Buckinghamshire-based craft beer brewery Rebellion Beer.

“The price of a barrel for a pub is probably 1-2%, so I don’t think it makes a big difference to be honest, but that’s a step in the right direction,” he told PA.

Draft beer tax cuts can also help “rebalance the difference between drinking at home and drinking in pubs,” Coombs said.

Detailed information required

Some producers, including Tom Bott, director of East London Brewery Signature Brew, said more information was needed to assess the impact of the change.

“Reducing obligations requires special details so that brewers like us can predict,” Bot told PA.

He said it was a “mistake” by the Treasury to apply a 5% tax cut only to draft beer and cider served in containers of 40 liters or more.

“The majority of the draft beer community sells barrels in 30-liter containers, so we exclude most of the industry and, in my opinion, the most exciting parts,” said Bot. I am.

He welcomed the freezing of beer tariffs, especially when brewers were looking at “countless supplies and running costs.”

Paul Davies, CEO of Carlsberg Marston’s Brewing Company, said:

“This is an intervention that provides the sector that has been hit hardest during the pandemic with the long-term financial support that is in great need.

“‘The Local’ remains in the hearts of the British people, and through the Long Live the Local campaign calling for the government, public support for pubs and breweries with more than 130,000 signatories is skyrocketing. Is clear. “It seems that the Prime Minister was listening.”

Jonathan Neem, CEO of Kent-based independent brewery Shepherd Neem, claimed to be the oldest brewery in the UK and said he was “happy” with the snack announcement.

“After the extraordinary challenges of the last 18 months, this is an important moment for beer and pubs, helping them recover and address the real supply chain cost inflation challenge.” He said.

In a budget speech, the Prime Minister also announced that sparkling wine would stop paying an “irrational” 28% tariff premium and match it with sparkling wine.

Alex Hunt MW, Purchasing Director of Berkmann WineCellars, an independent wholesaler supplying UK restaurants and retailers, said: wine. “

However, he was less than welcomed by the Prime Minister’s announcement of a tax increase on some higher-strength drinks such as red wine.

“This can add complexity again and can unfairly penalize consumers who prefer richer, more ripe style wines,” Hunt said.

Simon Veazey

Simon Veazey

Freelance reporter


Simon Veazey is a UK-based journalist who has been reporting on the Epoch Times since 2006 on a variety of beats, from detailed coverage of British and European politics to web-based writing of the latest news.

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