Brewers welcome Small Brewer Relief changes

Trade association the British Beer & Pub Association (BBPA) hoped the measures, combined with recent proposals set out in the wider Alcohol Duty Review, would build on the successes of SBR, while addressing long-standing distortion caused by the current structure.

A BBPA spokesperson said: “We welcome these changes to SBR, a scheme which provides a major boost to the UK’s small brewers. The proposals seek to more closely align with economies of scale and will address barriers to growth.

“Combined with the recent duty freeze and proposals set out in the new Alcohol Duty Review, we hope this will now stimulate business growth and investment in Britain’s brewers of all sizes at a crucial time in their recovery post-Covid.”

Many in the beer industry had been calling for SBR reform for years to remove the market distortions it caused and encourage normal business growth.

A spokesperson for the Small Brewers Duty Reform Coalition said: “After years of engagement, discussion and analysis we are very pleased that the Treasury has put forward sensible and measured proposals.

“This further support for the beer industry is a very important step in saving the British pint as we know it. This move recognises both the cultural and social importance of the British pint and will put the industry on a much fairer and sustainable basis in the future. Growth is now possible for brewers of all sizes without being penalised by the tax system."

Boosting business

The spokesperson continued: “This proposal fully protects the interests of the very smallest brewers who make up over 90% of the brewers in the UK, whilst staging duty relief to more closely align to diseconomies of scale.

“Recent Government actions will mean brewers of all sizes from the very smallest to the largest will be better off. We are grateful for the professional and even-handed way ministers and officials have dealt with the review.” 

The Coalition, formed in 2017 to galvanise support for SBR reform, was delighted by the reform which will more closely align with economies of scale in the sector, allowing for fairer competition and will incentivise the growth of brewers of all sizes.

T&R Theakston joint managing director Simon Theakston believed the reform was “good news” as will create a much fairer opportunity for UK brewers to thrive in the future as they seek to recover from the horrors of Covid.

In particular, Theakston said it will bring greater clarity to the SBR scheme and a much closer alignment with production economies of scale, which will allow for greater certainty of planning and the unlocking of capital investment, which is critical in safeguarding the future of cask ale brewing.

Owner of the Hogs Back Brewery Rupert Thompson said: “This further help for the industry on top of measures announced at the recent budget recognises that our sector has been historically overtaxed.

“The whole industry can look forward to a future where they are taxed less which will stimulate business growth and investment especially in small and mid-sized local businesses. It is fantastic that the Government has recognised that brewers support pubs and pubs strengthen local communities.”

Great news

Chief executive of Adnams Dr Andy Wood said the reform was “welcome news” and achieves a balance between safeguarding the interests of smaller brewers whilst creating an overall fairer system.

For Wood, the changes meant brewers could move on now to what they do best, brewing great beer, creating jobs and economic growth.

Chief executive of Timothy Taylor’s Tim Dewey said: “I am pleased to see HM Treasury publish the results of their technical consultation on reform to Small Brewers Relief (SBR). 

“As anticipated, the changes below 5,000hl are extremely modest in the context of a positive proposal that gets rid of the cliff edge that hindered growth and the provision of transitional relief for mergers and acquisitions. 

“I hope that our industry can now put the rather fractious debate on this issue behind us and focus instead on the need to rejuvenate the cask ale market, which was in significant decline pre-Covid and is in even greater stress since.”  

Patrick McCaig, Otter Brewery Ltd’s managing director believed the reform meant the glass ceiling had finally come down, meaning he could grow a local business knowing key costs were in harmony with production.

“This is great news for small brewers who can now confidently grow their businesses and supply a good local alternative to the dominating large brewers,” said McGaig,

He added: “It is great that the Government recognises this and I’m sure this news will be welcomed across our sector, by our great British pubs and their customers.”

The Society of Independent Brewers (SIBA) chief executive James Calder and SIBA National Chairman Roy Allkin said: “After three years of deliberating, the Treasury has today announced far-reaching changes to SBR– at last providing some certainty for small brewers so they can plan for the future.
“It is welcome that the Treasury has listened to SIBA’s representations on behalf of small brewers, and the views of MPs from across the political divide, to increase the 50% threshold from the proposed 2,100 hectolitres to 2,500 hectolitres.
“While it is disappointing that some small brewers between 2,500 to 5,000hl will have to contribute more in beer duty under the new system, our worst fears have been averted and the rate is more manageable than was proposed in the consultation. The changes also remove the ‘cliff edges’ that hindered brewers in the past and sets out a path to growth and a workable framework for the future.
“These changes demonstrate the Treasury has recognised the important role that SBR has served for the past 20 years in levelling up the brewing sector, investing more in the scheme and expanding it to include more breweries.
“We must now carefully consider how these new policies sit within the wider changes to the alcohol duty announced in the Budget and work through all the implications to ensure that small brewers can compete against the Global giants that dominate the beer and cider sectors.”