Our 11th market report showed SIBA brewers’ volumes rising by an estimated 6.8% last year to more than 1.4 million barrels. Our sector employs nearly 5,000 people — 25% up on 2011 — and most brewers are investing to generate further growth and jobs.
So there was plenty to raise a glass to, especially this close to BeerX, next week’s celebration of British beer in Sheffield.
The success of the local brewing sector stems from four decades of events: the drinkers’ revolt that led to the 1971 foundation of the Campaign for Real Ale, the 20 or so pioneering microbrewers who started SIBA in 1980, and the more recent growth in consumer demand for food and drink with clear local provenance and ethical credentials.
The one event that shaped British brewing more than any other was the introduction of Small Breweries’ Relief (SBR — also called Progressive Beer Duty) in 2002. In allowing new brewers duty relief on annual production up to 60,000hl, the then Chancellor Gordon Brown paved the way for our buoyant craft- brewing sector.
We can assume that’s because Brown knew his investment would be repaid. Last year, two-thirds of SIBA brewers re-invested SBR savings to build their businesses, buying new machinery, hiring and training staff and marketing their beers. This is what we call the “investment dividend”, which Government reaps from SBR.
With such a clear connection between investment in an industry and its success, we remain baffled by successive governments’ approach to beer duty: disinvesting in the same industry they support with SBR. By dropping the escalator, the Chancellor could support the rest of the industry, and expect a similar investment dividend, particularly in pub and bar employment for young people.
SIBA members have much to be positive about — and we’d like to see SBR extended, to offer the same help to all brewers who qualify under European law. But if pubs continue to fail, the estimated 3,200 craft beers produced by SIBA brewers will gradually lose their route to market.
Last week, as well as publishing our report, SIBA joined forces with industry colleagues, MPs and beer drinkers to “eliminate the negative” that is the beer duty escalator. Let’s hope the Chancellor acts on our advice, and we can look forward to a brighter future for British beer and British pubs.