As reported by The MA, the Treasury announced its decision to reduce the threshold for SBR, which offers eligible brewers a 50% discount on beer duty – from 5,000HL of annual production to 2,100HL on 22 July.
However, Jack Hobday – one of the founders of Anspach & Hobday Brewery on London’s Bermondsey Beer Mile – yesterday (10 August) launched a petition on the grounds that the Government’s plan is a “big threat” to small breweries such as his which will face higher tax bills under the proposed changes.
“Our small brewers have created better competition, consumer choice, jobs, local investment and strengthened local communities,” he said. “Please support us in reversing the proposed tax rises that could put hundreds of small breweries out of business.
“The Government has announced plans to change SBR. They have not yet released the details of these changes but they have made clear this change would entail some of the smallest breweries, including Anspach & Hobday, paying more duty.
“We are petitioning to reverse the proposed changes so that our brewery, and many others, can benefit from the certainty of SBR and not face another financial threat after we have managed through the Covid-19 crisis.
“The last thing small brewers need at this time is the uncertainty caused by these proposed changes.”
At the time of writing, the petition had gained approximately 7,450 signatures from concerned members of the public and those in the beer and brewing industry who will be hit hardest by the proposed changes.
As previously reported by The MA, the founder of Lincoln Green Brewery – a finalist in the 2019 Publican Awards’ Best Brewing Pub Company award – estimates the changes will cost them between £8,000 and £20,000 in extra duty per year and potentially halve its profits.
Huge own-goal
The petition has been backed by James Calder, chief executive of the Society for Independent Brewers (SIBA), who highlights there are more than 150 breweries in the UK which, pre-pandemic, sat between 2,100HL and 5,000HL of production volume and will now see their duty payments soar.
“Independent breweries have been left high and dry by the Government during Coronavirus, so to hit them now with a proposed tax rise will be devastating,” he said.
“During lockdown small brewers have seen beer sales drop by on average 80%, and just as they are taking their first steps back into normality the news of a proposed tax hike has caused a huge rift in the industry.
“For some breweries the rising tax bill could force them into closure and for many others it will stifle growth, as breweries delay growth in order to remain small to stay below the level at which beer tax starts to rise.
“It’s a huge own-goal by a Government aiming to kickstart our economy, stimulate growth, and get local businesses thriving.
“The fact the Government has signalled tax rises for small brewers, but not telling us by how much is further adding to the uncertainty, worry and anger.
“We need the Government to reverse the decision, or publish the details of their proposals so we know who are the winners and losers, and by how much.”
Pub impact
According to a separate petition launched by the Campaign for Pubs demanding Chancellor Rishi Sunak reconsider his amendments to the SBR threshold, the Government’s changes are “bad for publicans, pubs and pub customers.”
“Many pubs remain tied to restrictive contractual agreements which limit their access to these independent beers,” it stated.
“It is a mark of how important that choice of a small independent brewery beer is to the customer, that those pubs are prepared to pay a premium to their controlling pub company or pub-owning brewery in order to feature them – but they should be allowed to buy them direct and at a fair price for pub and brewer.
“If pubs themselves are to survive the long forthcoming period of recovery then they will be helped on the way by greater diversity on the bar, not less.”
However, response to the Government’s changes haven’t been uniformly negative from the pub sector, with The British Beer and Pub Association (BBPA) – whose members are responsible for 90% of the beer brewed in Britain and represents around 20,000 of its pubs according to its website – welcoming the threshold change, highlighting that the purpose of scheme is to compensate for diseconomies of scale and ensure bar top variety for Britain’s drinkers.
“Now worth £75m per year to small brewers, the changes announced aim to build on the success of the scheme,” the trade body’s chief executive, Emma McClarkin said.