Strong beer taxation is threatening to unravel a decade of growth for local breweries in London and across the UK, according to a report.
The Local Beer Report 2012, published by the Society of Independent Brewers (SIBA), has revealed the small breweries sector is currently thriving but warned that this will not be the case indefinitely. Its findings were based on a survey of 264 SIBA members.
Neil Williams, from the London-based British Beer & Pub Association, has urged the government to freeze beer tax next month to make sure the sector remains strong.
“Brewers, both large and small, all agree that the overall tax on beer in Britain is far too high,” he said.
“British beer drinkers pay 11 times more tax on beer than those in Germany. We have seen the rate rise by 35 per cent since 2008, with the government committed to further big rises in March.
“This is simply unsustainable, and we need a tax freeze in the Budget.”
Since the Small Breweries’ Relief (SBR) was introduced in 2002 it has become a shining example of what is possible with a period of targeted investment.
During that time SIBA’s membership has surged from 235 to 550 brewers, most of which are small businesses providing local jobs.
Williams pointed out that these benefits are evident in the growth of micro-brewing in recent years.
He explained how favourable tax treatments have increased these numbers by showing “lower taxes are the key to boosting what is a great British manufacturing industry”.
The report argues that despite the favourable returns on the SBR investment – with volume sales surging by 9.7 per cent among SIBA members last year – the government is planning to cripple British pubs, which are these brewers’ main route to market.
Williams added: “Beer and pubs really are ‘joined at the hip’ – draught beer is still the key seller in the pub, it’s a unique product, and supports huge numbers of pub jobs. There is no doubt that huge tax rises on beer have been very bad news for thousands of pubs in recent years, with many vital local jobs lost.”
Julian Grocock, SIBA’s chief executive, said, “What frustrates us, in our pre-Budget campaigning this year, as in previous years, is the government’s inconsistent approach to local brewing.
“They can see the positive results of their investment, in the form of SBR, and yet they seem unable to apply the same logic to pubs, which are, like small brewers, capable of making a valuable contribution to their local economy.
“The current beer taxation regime amounts to disinvestment in the local brewing industry.”