Small brewers ‘fighting the wrong people’ over proposed duty changes

13-Apr-2018 - Last updated on 13-Apr-2018 at 11:47 GMT

Reluctance: Lowe questioned the appetite for reform of Small Breweries' Relief in Government

There are “bigger battles” to fight than the current debate around duty relief for small brewers, according to one of London’s largest independent brewers.

In an interview with The Morning Advertiser, Fourpure co-founder Daniel Lowe questioned the appetite for reform of Small Breweries' Relief (SBR) in Government, and suggested that more time and resources ought to be spent trying to increase small brewers' market share by clamping down on anti-competitive practices.

“There is nobody in Government talking about revisiting Small Breweries' Relief,” Lowe said. "This is not a conversation that Government is having, or that Government has shown any inclination to want to have.

“We are sat in an industry echo chamber arguing about something that we have no control over, and the people that do have no interest in listening to.”

Lowe suggested that calls for reform of the current SBR scheme, which allows breweries to pay reduced duty rates on a sliding scale, were down to a number of medium-sized brewers “feeling the squeeze” in an increasingly crowded marketplace.

Paying full whack

“The Small Breweries Duty Relief Coalition guys popped up last year, and phoned us and our peers asking for support,” he said. “It is clearly a group of the more traditional regional, family cask brewers who are feeling the squeeze from the fact that they have small brewers on one side and large brewers on the other.

“They feel that duty is unfair because they are paying pretty much full whack and they feel it should be smoothed out.”

Lowe said that Fourpure had decided against joining the coalition, and cast doubt over the ability of the Society of Independent Brewers (SIBA) to raise the upper limit of SBR to 200,000hl, while also maintaining the current 50% discount for brewers producing under 5,000hl.

“We are quite a large producer and are already paying most of the duty that there is to pay, but we didn't see a huge value to getting involved with [the coalition].

"One thing the treasury is not going to do is they are not going to give more state support to the brewing industry. They have shown that by increasing duty in line with RPI, and if they wanted to offer state support to beer then they would have held that flat."

SIBA position criticised

Lowe continued: “SIBA has got the position that they would like to protect the 5,000hl and below limit, and they would love for us to pay less duty overall. Great, yeah, have your cake and eat it!”

On the subject of how Fourpure would like to see smaller producers supported, Lowe said that a reduction in overall duty and attempting to make the beer market fairer were better uses of industry time and resources.

“I think state support for the beer industry is better delivered in terms of an overall view on what the beer duty is, rather than changes to Small Breweries' Relief,” he said. “It is simple and easier to apply. Obviously if we had to pay less duty it would be great, but in terms of messing with SBR, I think there are bigger battles to fight.

“Trying to bring the market on to a fairer and more competitive playing field and overall support of the beer category is a much better use of the shared voice of the industry.”