The new support package, which will come into force from Saturday 1 April, recognises the manufacturing of beer, malt, cider and other fruit wines among others as energy intensive businesses.
British Beer & Pub Association (BBPA) chief executive Emma McClarkin said: “We welcome the recognition of breweries as energy and trade intensive and this will help alleviate some of this pressure in our sector, but we have been clear with Government about the continued vulnerability of businesses across our industry and the ongoing challenges pubs and breweries face.
“We are aware of the pressure that public finances are under, but energy costs are the single biggest threat to the industry right now to once strong healthy businesses.”
Reflecting difference
According to the Government’s website, this means eligible energy and trade intensive businesses, described as associated with higher energy use and less able to pass on costs to customers due to international competition, will receive a discount “reflecting the difference between a price threshold and the relevant wholesale price.”
The price threshold for the scheme will be £99/MWh for gas and £185/MWh for electricity on wholesale prices, though this will only apply to 70% of energy volumes will be subject to a “maximum discount” of £40/MWh for gas and £89.1/MWh for electricity, set to a price threshold of £107/MWh and £302/MWh respectively.
However, trade bodies from across the sector expressed “disappointment” with the Chancellor’s new energy scheme as a whole, with the Energy Bill Discount scheme set to reduce the support businesses will receive by 70%.
Under the new scheme, which will run until March 2024, non-energy intensive firms paying higher energy costs will see a unit discount of up to £6.97/MWh automatically applied to their gas bill and a discount of up to £19.61/Mwh applied to their electricity bills.
Survive and thrive
However, this will not apply to those paying lower energy prices.
Campaign for Real Ale (CAMRA) Chairman Nik Antona said: “The prospect of energy bills soaring in April as other costs keep rising and consumers tighten their belts will leave the nation’s pubs, social clubs, brewers and cider producers apprehensive about how they can continue to make ends meet.
“While we want to see energy support reinstated at current levels, it is now vital the Chancellor uses his Budget in March to announce a wider support package if our pubs are to survive and thrive.
“This must include proper reforms to fix the unfair burden of business rates and introducing the new lower rate of duty charged on draught beer and cider at 20% below the general duty rate. This would help keep pub-going affordable for customers and give our locals a fighting chance against the likes of cheaper supermarket alcohol.”