UK brewers are among the biggest and best in Europe, but the tax burden they face, compared to counterparts on the continent, is holding them back.
That’s the conclusion of new research from the Brewers of Europe organisation, which found that the UK is one of the biggest producers of beer in Europe, brewing 4 billion litres of beer per year — that’s 10% of the total production across the continent.
This figure places the UK only behind Germany, which produces 9.3 billion litres of beer. However, UK drinkers also pay the most tax on their beer, stumping up almost 40% of all beer duty in Europe.
The British Beer and Pub Association (BBPA) argues that this shows the growth potential the UK brewing sector has, and if taxation on beer in the UK was brought closer in line with that of Germany, it would see the sector grow even more.
At present, beer duty in the UK on a pint of 5% ABV beer is 54 pence. In Germany, the duty on the same pint would be just five pence.
The beer duty freezes put in place by the Chancellor in his two most recent Budgets help the UK’s brewing sector to grow and invest. While the UK may be the second largest beer producer, in terms of per capita consumption it is way down on the list, and its on-trade and off-trade split is still healthy.
Without doubt the great British pub still has an important part to play in this, says the BBPA. To build on the UK brewing sectors’ leading position in Europe and catch up with Germany, as well as to help pubs, the BBPA is continuing to ask for a cut or freeze to beer duty.
Holding back growth
Brigid Simmonds, chief executive of the BBPA, said:“We should be proud that the UK is one of the biggest producers of beer in Europe, brewing 10% of all the beer produced. Considering that we pay some of the highest tax on beer in Europe, this is no mean feat.
“The beer tax burden is harming UK brewers and holding back growth, as shown by the gap between the UK and Germany. Germany’s beer tax is approximately 12 times less than that of the UK and, as a result, it brews over twice as much beer as us.
“Recent freezes on beer duty by the Chancellor have been proven to support UK brewers’ growth, help pubs stay open and increase revenue for HMRC. It’s a no brainer to reduce beer duty, so let’s hope the Chancellor continues to recognise this.”