A Bitter Dispute: Brewers Collide Over Government Beer Duty Relief

The often-sour tasting world of UK politics and the enticingly passionate craft beer community have collided this year, leaving all concerned with a less than lovely taste in their mouths. At the annual meeting of the Campaign for Real Ale, held on the 21st of April 2018, members debated a motion that would potentially see them launch a campaign against the beer duty relief given to small brewers in the UK.

This policy, established in 2002 by Labour PM Gordon Brown, gives up to 50% beer duty cut to breweries that produce under 60,000 hectolitres (or 10million pints) a year. It has been credited with the meteoric rise of the craft beer industry in the UK, where we now have some of the best independent breweries in the world, and the country became home to 300 new breweries in 2017 alone.

Beer Duty Relief

However, the future may not be all golden for UK craft beer brewers. Since the beginning of 2018, a collection of sixty breweries (including many owned by large conglomerates such as Fuller’s and Marston’s) calling themselves, somewhat disingenuously, ‘The Small Brewers Duty Reform Coalition’ have been campaigning to get the government to cut this duty relief.

This group wants to petition the government to cut the beer duty relief to 50% for breweries producing less than 1000hl per year, and increase the upper limit (for 10-20% relief) to 200,000hl per year. Some suggest that the current relief scheme discourages brewers from growing their production and gives smaller breweries an unfair advantage over medium sized ones.

Proponents of the scheme counter that this has allowed niche breweries to grow and flourish, including such interesting business ideas as Toast Beer, who make beer using ingredients from wasted bread, or Bellfield, who make gluten free beer for the coeliac market. Many of these breweries may not have been able to make enough profit to expand in their early stages, without the duty relief.

Still, smaller brewers can rest slightly easier as of April. The prestigious and influential Campaign for Real Ale group’s membership voted against the proposal tabled by The Small Brewers Reform Coalition and not long after, several of the UK’s biggest independent brewers left the coalition and put out a statement withdrawing their support.

‘We do not wish to be associated with any one particular proposal or solution, until there has a been a proper debate and a consensus formed between industry organisations’ said the official statement, from the group which includes such establishments as Beavertown Brewery, Magic Rock Brewing and Wild Beer Co.

Unfortunately, though, this may be all a sideshow to a growing problem – the difficulty many breweries face in selling craft beers to pubs owned by ‘pubco’ chains, such as Punch Taverns or the Ei Group. Because many of these pubs are tied into contracts for multinational beers through their parent supplier, they have less room for craft beers from smaller producers… and less of the budget to spend on them. Things have been bubbling up nicely for small breweries in the UK for many years, but without organisation and commitment to keep it that way – this could soon change.