Companies representing more than 50 UK breweries have signed up to the Small Brewers Duty Reform Coalition (SBDRC) launched on January 18, with the aim of asking the Treasury to review and improve small breweries relief (SBR) to ensure it supports a sustainable market.
SBR is the system that provides a discount on beer duty to small brewers. To help make the case to the Treasury, the coalition is also currently finalising terms of reference for an independent review, which will be undertaken by a firm of leading consultants, starting at the end of February. This will help to frame the debate on reform.
The review is intended to provide an independent, objective analysis of the workings of SBR to ensure it allows for fair competition by minimising market distortion, encourages growth and ensures a sustainable and dynamic brewing sector.
The consultants will be invited to make any specific recommendations for improvements to the system that would:
- unlock growth potential of emerging brewers
- deliver fairer competition for brewers of all sizes
- stimulate export of British beer
- continue to promote diversity and recognise diseconomies of scale of small brewers
Richard Burhouse, managing director of Magic Rock Brewery, which recently joined the coalition, said: “The way SBR above the low threshold is currently calculated puts barriers in front of progression for successful breweries.
“In addition to the necessary spending to facilitate growth, it’s imperative that we invest in people and quality control, but the additional duty we pay makes this difficult and puts us at a competitive disadvantage in the marketplace. This is one of the reasons I’d welcome a review of the current situation.”
Coalition co-chairs, Rupert Thompson and Collin Wood, added: “We are delighted that more and more brewers are joining the coalition, and we continue to approach new potential members, who share our concerns that we need a sustainable system of SBR. We hope that all parts of the sector will feed in their views to the independent review.”