The Vultures Are Circling. Again.

“Just when you thought it was safe…….” Here go the Small Brewers Duty Reform Coagulation. Again.

Forget the ABInbevs, Molson Coors of the world. In a UK context THIS is Big Beer. Big Beer with all of the PR and spin merchants that it can throw money at. All with the aim of increasing market share. In a declining market.

And using their access to the ear of Government to state their “case”.

If I hear the phrase “level playing field” one more ******g time I might just howl.

You have to admire “Big Beer 2019”. With its pretty websites and finely “crafted” phraseology. All with the ultimate aim – openly stated or otherwise – of closing down the competition. The small guys. The Micros that you and I know and love.

In the name of shareholder dividends and balance sheets.

This is about Progressive Beer Duty. And Big Beer UK’s simultaneously shadowy yet naked attempt to grab a bigger piece of the pie. At the expense of – what I regard as – the golden age of choice and beer diversity.

So. Let’s look at the Small Brewers Duty Reform Coalition

You’ve got to admire their transparency….. Oh. Hang on a minute……

When this all kicked off last year, there was a list of breweries that signed up. Very quickly, some of the breweries who signed up – not knowing the full agenda – quickly withdrew. Recognising the effect that “pulling up the ladder” would have on others (including many friends) who were on the rung that THEY were on not too long before.

Then I saw a list. A copy of which is in this post.

Having been privy to the letter at the top from H M Treasury (received by brewers this week), I thought I’d have a look on the SBDRC website, just to see who the members were now. Now that their true colours are revealed.

Nothing.

So. Being a cheeky wee scamp, I followed the trail of breadcrumbs to a contact email address….

As you can imagine, I can count the number of replies on 0 fingers. That’s almost 3 weeks later.

(Just double checked – to avoid embarrassment. Still zero)

Some of their PR /Propaganda is quite shameless and – to put not too fine a point on it – so far from the truth to be actually l… (am I allowed to say “lies”?)

“Its unfair to ALL small brewers…..” (I left the apostrophe out)

EH? WHAT???

SIBA published a study in 2017 (sponsored by them but independently researched and written) by CEBR

I don’t mind saying that this is a right dry bastard of a read. (If you – like me – are an insomniac, type “Small Brewers Duty reform report” into Google, you’ll find it. Sleep well!) But my inner stats geek loved an hour staring at pretty graphs and tables….

In essence, this table demonstrates the cost of making beer relative to the size of brewery. And demonstrates the economies of scale that larger brewers have. That it still costs more – even including the reduced duty rate – for small brewers to produce beer.

But no. Our friends in the “Coalition” won’t, can’t, say that. That would demonstrate a levelling of the playing field. Precisely their argument, but thrown back.

Last year, the “Coalition” were talking about reducing or removing the relief from duty for brewers above 1k hectolitres – a hectolitre being 100 litres. Or 2 1/2 9 gallon casks.

Do the maths with me here.

If an average (let’s say 6 or 7bbl) brewer brewed 3 times a week at full cap. Giving a 4 week break (yes brewers, I know that it’s dreamland in terms of hols, but…) that equates to just over 1612hl. If that brewery brewed 4 x per week that is near 2200hl.

Under those terms, that brewery would be paying 50% more duty on those 1200hl above the original SBDRC level.

Take a 10bbl brewery. 3 brews per week… Christ! That’s 2304hl…..

Now they talk about the differences between 500hl and 5000hl. 500hl!

Let’s be clear. Some breweries that YOU know, will be at THIS moment, clinging on. Getting beer into pubs is NOT easy, especially in a market dominated by big pubcos that demand beer at the lowest possible prices. Prices that “Big Beer” can (and do) supply at. Just look at any Wetherspoons bar….

This relief was introduced by Gordon Brown (as Chancellor) in 2002 in order to provide a boost to growth in the Micro Brewing sector. The stats don’t lie. And we have all seen the explosion in numbers of breweries in the last 6 or 7 years. This growth of numbers would not have been possible without SBDR. I quote the CEBR report again….

But that net growth has slowed massively.

I must confess that I worry about new market entries in brewing. It’s very difficult to make a “splash” in this market. For every standout opening like Pomona Island, there are many who don’t make that reputational impact.

And making a reputational impact is all well and good. You still have to sell beer. And compete at the bar, with those very breweries that are seeking to “do your legs” with their ability to sell beer cheaper into the chains and into wholesalers.

And I’ll never forget looking at a young enthusiastic and ambitious brewer in Manchester a few years back – one that was seeking to expand – and asking “Why would you do this?”

I hated not being more positive. I truly did.

I’m not a writer. “I’ve never took a paper or a learning degree” I’ve got no stake in any brewery, other than emotional. The only self interest I have (if any) is the ability to source fabulous beer from the best available independent breweries in the UK for #ISBF6….. #ISBF7…… But be under no illusion, by their own words (re “mergers and acquisitions….”) the Vultures of “Big Beer UK” are Circling.

If the Vultures of the SBDRC get their way – and the Treasury reduce or remove the level of relief for those breweries below that magic 5000hl – the brewery landscape that YOU now love and treasure, those breweries whose excellence allows me to put on #ISBF, will be picked clean to the bone.

What I, WE, love, this “Golden Age” of beer, is under threat.

Them Damn Vultures. Circling. Again.

8 comments on “The Vultures Are Circling. Again.

  1. Make sure to let us know if you do get a current list as looking at the old one just there are some big brewers, some that I swear have been secretly taken over by Marston’s & some that have varying percentages of uwberdhip by multinationals.
    I appreciate the torch shining Jim.

  2. It is unfortunate that most brewers are white middle class males because they seem to believe that the angel of death that is duty reform will pass them by . However they are wrong, with very few disadvantaged ethnic minorities and women to take the hit as is usual thier sense of privelege and cowardice in the face of this outrage will come to bite them in the arse and it serves them right . We had one chance and it is about to be lost

    • The degree of complacency (with a few limited exceptions) is surprising.

      I come at this from an educated (with a very small e) consumers viewpoint, who cares passionately about people who are now friends with their futures and dreams tied up in this thing we call beer.

      I genuinely fear the consequences of the treasury acting (tempting as it is) on the poison words being dripped in their ears.

  3. I just filled in an HRMC questionnaire about this very thing. I’m a brewer, but of mead, rather than beer. While I agree that small brewers benefit (and should continue to do so) from the duty relief, as do cider-makers, I do not get a single penny of duty relief, despite brewing only 31 hectolitres, last year. This is rather galling when beer-makers can brew up to 6 million litres and still get help from the government. However, it is deeply shameful to be “pulling up the ladder” and in fact, I’m trying to get the ladder shared around more fairly. As a mead maker, I pay about 30% of my turnover straight to the government in taxes of various sorts; the greatest of these being duty.

  4. Thanks for the article, and the detective work. Not all are complacent – there is much activity, not all of it tub-thumping. In the grand tradition of old-school democracy, feel
    free to write to your MP about this; the gist should be : Ref. HM Treasury review of Proportional Beer Duty – No change to Small Brewers Relief below 5,000 hl per annum. Otherwise a whole bunch of small brewers, and their employees, family, friends, pet toads, and most importantly TAXES, are going to be lost to the nation.

    • Thank you for the compliment.

      I do believe, however, that there isn’t enough noise on the part of Micros and that the SBDRC have more than a head start on this with their campaign of misinformation and – let’s not be shy – lies.

      I may not personally be in this business at this time (although – in the guise of The Independent Salford Beer Festival – I have a small interest), but I’ll be damned if I just sit by with my lips shut.

      It’s not my style.

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