The chancellor has announced measures in the Budget which seems to favour Britain’s traditional cask ale brewers and cider makers.
The number of duty bands for alcohol would be cut from 15 to six, Sunak said, simplifying an historically complex state of affairs. “Our new system will be designed around a common sense principal: the stronger the drink, the higher the rate [of duty].”
He also announced:
- A reduction of 5% on draught beer and cider, compared to supermarket and off-licence sales, coming in in 2023
- Proposals for a new small producers relief, not just for brewers but for small cider makers and others producing alcoholic drinks of less than 8.5% ABV
- A cut in duty on fruit ciders
- The cancellation of a planned increase in alcohol duty from midnight tonight
- A 50% cut in business rates for hospitality, leisure, and culture premises for a year
- Business rates relief available for green technology and property improvement projects.
Nik Antona, chairman of the Campaign for Real Ale (CAMRA), said: “The introduction of a draught duty rate is a gamechanger for cask beer drinkers, cider and perry drinkers, and the Great British local.
“This is something CAMRA has campaigned on for many years and we are delighted that the government has listened, supported our locals, and introduced the important principle that beer, cider, and perry served in a pub or social club should be taxed at a different rate to alcohol bought at places like supermarkets.
“CAMRA has previously commissioned research that showed that a draught beer duty rate could pull consumption into pubs and social clubs from the off-trade, providing a boost to pubs and local economies. We hope that pubs and producers will make sure drinkers see the impact of this revolutionary policy on the price of their pints, to encourage them to return to their locals.
“We look forward to campaigning for future reductions in draught duty, to make sure that consumers, brewers, and publicans can enjoy the maximum benefits of this ground-breaking new policy.”
There is concern that the new draught beer rate will not benefit craft, or keg, beer brewers in the same way as cask brewers because of the relief cut-off point. It will apple to draught beer in containers of 40 litres or more, most craft coming from 30l containers. On Twitter, James Calder, chief executive of the Society of Independent Brewers (SIBA) said the 40l limit was “moveable” and “not set in stone”. Indeed, this government paper appears to acknowledge that tere is still room for consultation on the measures announced today.
It seems that small producers’ relief will supercede small brewers’ relief, but only in relation to drinks up to 8.5% ABV. The question of relief for stronger brews seems unanswered.
An alcohol duty explainer from The Treasury
Key quotes from the Chancellor’s speech
“I’m announcing proposals for a new small producer relief. This will extend the principal of small brewers’ relief to include, for the first time ever, small cider makers and other producers making alcoholic drinks of leass than 8.5% ABV.
“Sales of fruit ciders have increased from one in 1,000 ciders sold in 2005 to one in four today. But [their producers] can pay two or three times as much duty as [producers of] cider that is made with apples or pears. So we are cutting the duty on them, too.
“The fourth step I’m taking today would directly support the home of British community life for centuries — our pubs. Even before the pandemic, pubs were struggling. Bteween 2000 and 2019 consumption in the on-trade fell by 40%. And many public health bodies recognised that pubs are often safer drinking environments than being at home.
“So, as the members for Dudley South and North West Durham will agree, a fairer, healthier system supports pubs. So I can announce today draught relief. Draught relief will apply a new lower rate of duty on draught beer and cider. It will apply to drinks served from draught containers over 40 litres. It will particularly benefit community pubs who do 75% of their trade on draught. And let me tell the House the new rate. Draught relief will cut duty by 5%.
“That is the biggest cut to cider duty since 1923. The biggest cut to fruit ciders in a generation. The biggest cut to beer duty for 50 years. This is not temporary, it’s a long-term investment in British pubs of £100m a year and a permanent cut in the cost of a pint of 3p.
“These much-need reforms will come into effect in February 2023. But I want to help the hospitality industry right now. So, for my final announcement on alcohol duties today, I can confirm that the planned increase in duty on spirits like Scotch whisky, wine, cider, and beer, will all, from midnight tonight, be cancelled. That’s a tax cut worth £3bn.
“Our alcohol duty reforms make the system simpler, fairer, and healthier. They help with the cost of living while tackling problem drinking, they support innovative entrepreneurs and craft producers, they back pubs and public health, and they are only possible because we’ve left the European Union.”
