Campaigners have won a concession in forthcoming draught beer duty changes with the chancellor saying the new rates will now apply to smaller beer and cider containers.
When a new rate of duty for draught beer and cider was announced by previous chancellor Rishi Sunak, he said it would apply to products in containers of 40 litres and over.
However, many craft beer producers use 20-litre containers, while the use of 36-pint pins is common for micro- and smaller pubs, who have small turnover or want to offer a broader range.
The changes are due to come into effect next summer. The chancellor also added that there would be no rise in beer or cider — or wine or spirits — duty generally.
It remains to be seen, though, how much the change will mean to brewers and cider-makers when energy and other costs remain sky high.
Roy Allkin, chair of SIBA, said: “Small independent brewers will be cheering the new chancellor today with the announcement that he’s listened to our concerns and included the 20- and 30-litre containers used by independent brewers in the new draught duty.
“Our ‘Make It 20’ campaign received cross-party support and the change will have a huge impact on the ability of small brewers to benefit from the duty discount. It is also very welcome to see the chancellor freezing alcohol duty rates from February 2023, providing additional support to a struggling sector.
“Delaying the introduction of the draught duty rate until next summer, as opposed to February as originally planned will, however, come as a disappointment to many small brewers, who have already factored these changes into their business plans for next year.
“Combining the successful small brewers’ relief, which is 20 years old this year, with small producer relief is very complex and there will inevitably be winners and losers, especially hitting those brewers making innovative stronger products, like imperial stouts, above 8.5%.
“We look forward to working with the new Exchequer secretary and chancellor to get the details right on these changes, and ensure that we continue to have a vibrant, dynamic small brewing sector fit for the future.”
CAMRA chair, Nik Antona, said: “The chancellor’s announcement that the new rate of duty for draught beer and cider will go ahead from August 2023 is fantastic news for the great British local, as the tax system will recognise that beer, cider, and perry served in a pub or social club should be taxed at a lower rate to alcohol bought in the likes of supermarkets.
“Crucially, this new lower rate of tax for draught beer and cider will now apply to containers of 20 litres and over, and bag-in-box products, and not the larger 40-litre containers originally planned for, meaning smaller breweries, cider producers, and pubs can all benefit.
“This groundbreaking policy should help pull consumption into pubs, clubs, and taprooms, helping to encourage pub-going and keeping our beloved locals viable, alive, and thriving.
“We are also delighted to learn that the Treasury will consult on changes to the definition of cider for tax purposes. We will be making the case for all cider to contain at least 50% fresh fruit juice, to ensure that consumers are getting a high-quality product, and to create renewed demand for acres of orchards that are currently being wound down at detriment to our natural environment.”
However, he added: “The UK’s world-renowned pubs and breweries pulled out all the stops to survive the pandemic, but thousands face not being able to make ends meet as bills and costs have soared.
“The government’s energy price cap for businesses is very welcome, but we believe the business energy support scheme should be extended for a two-year period as quickly as possible to provide certainty for pubs and breweries.
“Ahead of the chancellor’s first full Budget later in the year, CAMRA is continuing to call for changes to the business rates system to stop the unfair burden on pubs, and for the chancellor to cut VAT on food and drink for hospitality businesses, as costs for pubs continue to skyrocket as customers tighten their belts.”
Emma McClarkin, chief executive of the British Beer & Pub Association, said: “We welcome the steps taken by the government in the chancellor’s fiscal statement. The measures announced today will mean a boost of £500m for our sector, enabling growth following successive crises and allowing us to thrive in the future.
“Coupled with this week’s intervention on energy bills, these commitments will make a significant difference to our pubs and brewers at an acutely difficult time.
“The chancellor’s plans show that the government recognises how extreme the cost of doing business has become and the enormous investment our sector makes, not only in the economy, but to the social fabric of communities across the breadth of the UK and why it must be protected. We look forward to the continued reduction of taxation on the sector at the next Budget — the need for a reduced VAT rate for hospitality and business rates reliefs remain as strong as ever.
“We will continue to work with the government to ensure that reforms to the draft beer duty rates are brought forward as soon as possible, meaning that our pubs and brewers can contribute to, and be at the heart of villages, towns and cities for many years to come.”
The Campaign for Pubs notes no mention of VAT or business rates…
Kate Nicholls, chief executive of UKHospitality, also mentions business rates and VAT…
