Local brewers organisations voices its opinion on Government alcohol taxation plans

8th September 2010, 9:52am

In its submission to the government's Alcohol Taxation Review, The Society of Independent Brewers (SIBA) stresses its readiness to support the Treasury if it actually 'walks the walk' to formulate and deliver a sustainable strategy to achieve its aspirations.

Presenting a local brewing industry that embodies many of the qualities of the Coalition's 'Big Society', chief executive Julian Grocock said, "Local brewers are exactly the type of business that this government says it wants to see prosper: independent, entrepreneurial and rooted in their communities, providing direct and indirect employment for local people." 

Within the submission, SIBA has asked the government to confirm its commitment to retaining Progressive Beer Duty (PBD). 

SIBA points out that the previous administration's policy of a high and escalating duty on beer has been "fiscally inefficient, socially and culturally detrimental and commercially damaging."

It has shifted consumers away from the controlled, socially responsible drinking environment of the pub into the supermarket for their drinks purchases – and the impending VAT increase will widen further the on-off trade price differential. SIBA recommends a cut in beer duty to balance the VAT hike. 

SIBA also urges the government to look at creating a duty structure that would encourage consumers to choose lower alcohol drinks like draught beer over higher ABV beverages that "contribute far more readily to a 'binge drinking culture". 

In response to recent calls for a spirits duty freeze, it states, "There can be no sense at all in allowing spirits to become relatively cheaper as part of a strategy to tackle drink-related problems." 

It also argues that there is a "compelling argument" for equalising duty systems for beer and cider, pointing out that the smallest brewer, although receiving 50% relief under PBD, is still paying more in duty than a major brand of Irish cider. 

On PBD, SIBA's submission states, "83% of SIBA members receive the full 50% abatement on all their production, and have a crucial vested interest in its continuation for their ongoing commercial viability."

The resultant failure of many smaller brewers would, according to Grocock, "be bad not just for our sector, but for the whole UK beer market, which has been transformed by the innovation of the microbrewers."

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