Betrayed

"Some 15 months ago a storm was raging above the pub and brewing industries.

It was the height of the Daily Mail's campaign against pubs, the medical profession was starting to talk about alcohol consumption in an unprecedented fashion, pricing and labelling of alcohol were becoming contentious issues and we were still coping with the new Licensing Act.

As an industry, we recognised the need to be proactive and respond to these and other issues. It was against this background that we made what we believed at the time was an acceptable submission on beer duty prior to the 2007 Budget and subsequently saw 1p added to the cost of a pint of beer.

Immediately following last year's Budget we began the lobbying process for this year's statement by the Chancellor. I chaired the British Beer & Pub Association's duty panel and one of our initial tasks was to look at where we could improve our submission.

We met with Treasury officials on a number of occasions last year and found ourselves involved in open dialogue. We presented our arguments, they asked us questions in return.

All in all we felt the department understood the scale of financial distress the brewing industry was facing, what with rising malt and utility prices, a low return on capital of some 3.5 per cent - which, given the cost of money today, is unsustainable - and evidence of increasing pub closures. We felt we were getting our message across.

Other parties supporting this process had included the Society of Independent Brewers (SIBA) and the Campaign for Real Ale (CAMRA), which had also made submissions to MPs and numerous government departments.

We received very strong support from the All-Party Parliamentary Beer Group, headed by Labour MP John Grogan. The debate concerning supermarket pricing and vodka and cider consumption particularly struck a chord with ordinary MPs.

We made our final Budget submission in January this year. At the time we genuinely believed we'd shown over the last 15 months why the consumption of a low alcohol product - beer - in a controlled environment - a pub - was part of the solution to current ills, not part of the problem. We felt we had illustrated how one could effectively target alcohol-related problem areas and make a difference, and that alcohol is beyond revenue maximisation - when duty rises significantly, revenues actually fall.

On the day before this year's Budget we felt we'd made real progress. So the rise in beer duty came as a real shock. It smacked of being a political decision, one at once arrogant and ignorant, concocted by a Chancellor and a Prime Minister who see all of the £40bn-worth of activity in our industry as a social problem.

The latest move is nothing less than a kick in the teeth for the one million people who work in the pub and brewing sectors.There is, bizarrely, a silver lining to all this, however.

By his actions Darling has pushed the debate beyond that of being about social ills to the point where he has stirred up thousands upon thousands of licensees and brewery workers, all of whom are being penalised by a political gesture.

But the Budget is done. What do we do now? We have to show Darling's rationale as flaky, shallow and half-baked. We have to build momentum for a platform for change.

Of course, it could be argued that we failed to get our message across to those politicians who mattered. But I believe that this duty rise is a capricious swipe aimed at our industry from a weak and dying government.

Our message on alcohol has always been clear and consistent. But I would accept that we must be more robust and find better ways to get the message across.

We will be exploring just how to tackle this in the coming weeks."

Jonathan Neame is chief executive of Shepherd Neame​