In a statement to its members, the Coalition accused SIBA of omitting its recommendations for reform of SBR, and stated that the organisation’s proposals “do not address the fundamental problem of market distortion in the small brewing sector”.
“We are delighted that the Society of Independent Brewers Association (SIBA) have accepted the need for significant reform of Small Breweries Relief (SBR) and are now going to actively campaign for it,” the statement said.
“It is good to see that SIBA have adopted a number of the proposals that the coalition developed last autumn, although they have omitted others that are essential to ensure SBR works fairly for brewers of all sizes.
“Without resolution of those issues we do not believe there will be sufficient industry consensus to push reform through and so we are repeating our original call for a Treasury review.”
'Duty differential'
The Coalition is concerned that the existing SBR scheme, and SIBA’s proposals for reform do not address what it calls the “duty differential” between small and larger brewers”.
It believes that breweries producing between 1,000 and 5,000hl a year currently enjoy uncompetitive advantages as a result of the current SBR system (these producers receive a 50% duty discount), and wants to see the upper limit at which brewers receive duty relief extended to 200,000hl.
“In the absence of the broad consensus the Treasury has requested, we believe that a Treasury call for evidence remains the only way of resolving the differing views,” the coalition said. “It allows all parties to make a submission.
“Without consensus or a Treasury review we do not believe the Treasury procedures will allow them to impose a solution so there will be no change, which would be deeply frustrating for all of us.”
Areas of agreement
The Coalition added: “Where we agree with SIBA is on the key principles for SBR reform and that the cost of reform is small in comparison to the long-term benefit to the economy. We also agree on the need to bring down the overall rate of beer tax.
“The high duty rate in the UK is at the heart of the problem – more than three times higher than the EU average, ten times higher than Germany and higher than all other production costs combined for most brewers.
“This is why the 50% discount rate is so distortive as between those that have it and those that do not.”
Last week SIBA outlined its proposals for reform of SBR which included changes to the shape of the relief curve for breweries making more than 5,000 hl per year, no withdrawal of relief for any brewer below 5,000hl and an extension of the scheme to brewers up to 200,000hl as permitted under EU law.
Boththe Campaign for Real Ale (CAMRA) and the British Beer & Pub Association (BBPA) have also called for a Treasury led review of SBR.