A petition launched yesterday, which calls on the government to reverse the proposed tax rise for small independent breweries, has received more than 7,000 signatures in its first 24 hours.
The Treasury announced changes to small brewers’ relief (SBR), the progressive tax system that revolutionised UK brewing, which will reduce the 50% duty relief threshold from 5,000hl to 2,100hl. Small breweries will have to pay more duty, while larger breweries could pay the same or less.
At the time of going to press, the petition had gained 7,450 signatures from concerned members of the public and those in the beer and brewing industry who will be effected by the proposed changes.
Jack said: “This is a big threat to small breweries across the country. Our small brewers have created better competition, consumer choice, jobs, local investment, and strengthened local communities. Please support us in reversing the proposed tax rises that could put hundreds of small breweries out of business!”
Small brewers’ relief is largely credited with the upsurge in small independent breweries over the last 20 years, creating a diverse and successful British brewing industry. Consumer choice and quality, when it comes to beer, has never been as high, but the proposed changes could seriously damage the industry.
Jack said: “The government has announced plans to change small brewers’ relief on duty. They have not yet released the details of these changes, but they have made clear this change would entail some of the smallest breweries, including A&H, paying more duty.
“We are petitioning to reverse the proposed changes so that our brewery, and many others, can benefit from the certainty of SBR and not face another financial threat after we have managed through the covid-19 crisis. The last thing small brewers need at this time is the uncertainty caused by these proposed changes.”
SIBA chief executive, James Calder, said: “Independent breweries have been left high and dry by the government during coronavirus, so to hit them now with a proposed tax rise will be devastating.
“During lockdown, small brewers have seen beer sales drop by, on average, 80%, and just as they are taking their first steps back into normality, the news of a proposed tax hike has caused a huge rift in the industry.
“For some breweries the rising tax bill could force them into closure, and for many others it will stifle growth, as breweries delay growth in order to remain small to stay below the level at which beer tax starts to rise. It’s a huge own-goal by a government aiming to kick-start our economy, stimulate growth, and get local businesses thriving.
“The fact that the government has signalled tax rises for small brewers, but not telling us by how much, is further adding to the uncertainty, worry, and anger. We need the government to reverse the decision, or publish the details of their proposals so we know who are the winners and losers, and by how much.”
The petition is gaining momentum quickly and once it reaches 10,000 signatures will require a government response. At 100,000 signatures, it will be considered for debate in Parliament. To sign the petition, or view the current numbers, visit petition.parliament.uk/petitions/334066
What the brewers say
Peter Jackson, Southwark Brewing Co
“How the government can penalise smaller microbreweries to the benefit of larger breweries at this time is unbelievable. Most, like us, are focused on the pub trade, and business is already running at a third of a year ago, and then increasing costs on top. It will be the final straw to many.”
Andy Parker, Elusive Brewing
“Elusive Brewing supports this petition and welcomes the campaign to reverse the government’s decision to reduce the SBR threshold. Many breweries have benefited from the 50% reduction up to 5khl as they’ve grown, including those who have campaigned to effectively lift the drawbridge after they’ve crossed it. We feel this is primarily an anti-competitive move by a small number of larger breweries, designed to hurt small producers such as ourselves in order to increase their profits. It also paves the way for larger breweries to acquire smaller ones for the duty benefit, potentially limiting consumer choice.”
Anthony Hughes, Lincoln Green Brewery
“We’ve utilised SBR since 2012 to self-invest in growing from a single brewery with two employees to a brewery with pubs and almost 70 employees in 2020. The decision to change the level of SBR to 2,100hl has put paid to further expansion — completely the opposite of the intention of the change. It may be cost-neutral to government, but it’s a reverse Robin Hood tax that takes from small to give to the large, hindering the growth potential of smaller brewer.”
Stephen Francis, Elland Brewery
“We currently brew around the 4,500hl mark. The current SBR means that we can make a modest profit over the course of the year. I support the extension of brewers’ relief to help breweries like ours to increase output. But not at the expense of destroying the viability of most of the sub-5000hl breweries. The Proposed changes to SBR would rob the small brewers to feed the profits of larger brewers at the expense of reducing the level of consumer choice locally and nationally.”
Geoff Southgate, Wensleydale Brewery
“We have been in contact with Rishi Sunak since SBR was proposed, stressing that these changes will directly affect us, at a time where we are looking to expand and employ local people, and the fact it is going to be brought in regardless and during such great uncertainty for the trade as whole, is extremely disappointing.”
Richard Bennett, The Pilot Brewery
“The small brewers in this country are the ones that have brought innovation and consumer choice back to this industry. However, many of these entrepreneurs are threatened by this government’s ‘reverse Robin Hood’ plans. Surely it is the Conservatives that would back small independent businesses? Perhaps not.”
Sean Calnan, Old Dairy Brewery
“Whilst I appreciate, over recent months, as a nation we have run up a huge debt, surely tax rises should be aimed at those that can afford them, rather than the small businesses that have been hardest hit through the period?”
Tim Bloomer, Fell Brewery
“This feels a lot like getting kicked while we’re down. This change is mindless and will result in job losses and reduced revenues to the treasury. It makes no sense at all.”
Charles Abbott, IVO Brewery
“Awful news for those 180 breweries that fall into these production levels, many of whom are already struggling due to COVID19, and now are finding that any plans they had to start to rebuild their businesses and livelihoods will have to be put on hold.”
Andy Herrington, Ainsley Ales
“Ainsty Ales in a small independent brewery based in York and, like many others, was hit very hard when the coronavirus pandemic hit. Any reduction in beer duty and/or VAT at this immediate time would really help the business survive, and also help the local economy …. We’ve already had to make redundancies and the current uncertainly in our sector makes it a very worrying and difficult time.”
John Allcroft, Grafton Brewery
“The Treasury has not listened to any small brewery. It is incorrect to say that the more a small brewer produces the cheaper beers gets to produce — that is only true for those above 10,000hl.”
Thomas Cooper, Barefaced Brewing
“The government seems to be doing everything they can to make life harder for small brewers trying to bring flavour to UK beer. At a difficult time for all businesses, increasing our already large tax contribution is disgusting.”
Richard Peters, Firebird Brewing Co
“Brewers who have made it to scale have lobbied the government for this anti-competitive change in duty. Unfortunately, the government has swallowed their story. The change makes it much harder for small craft brewers to grow. Coupled with the challenges of covid, this can only mean reduced consumer choice from an industry the country is rightly proud of.”