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BBPA urges Chancellor to reduce duty on beer

British beer exports up – BBPA calls on Chancellor to back British beer in the Budget

  • Six per cent rise in beer exports – and 500 per cent rise to China
  • Beer third most valuable food and drink export
  • Tax cuts needed to foster export growth, says Brigid Simmonds 

British brewers are raising a glass to a sharp, six per cent rise in British beer exports in 2016, according to new figures published by HMRC.

There was an extraordinary 500 per cent rise in exports to China, as British brewers capitalised on interest in British beer following pictures of Chinese President Xi Jinping enjoying a beer with former Prime Minister David Cameron in 2015.

Exports to India also rose, by a thirst-quenching 417 per cent, and exports to the EU showed solid growth of five per cent. Overall, exports to non-EU nations rose by six per cent.

British Beer is the UK’s third most valuable food and drink export, with a value of £584 million, an increase of £84 million on 2015.  A total of 1.05 billion pints of beer are exported.

Currently, 63 per cent of Britain’s beer exports go to the European Union, with the remaining 37 per cent heading outside the EU.

Although UK beer duty is not payable on exports, a high rate of beer duty acts as a real barrier to the investment needed to help foster further export growth. The BBPA is urging the Government to reduce the beer duty burden currently faced by the sector and cancel the planned inflationary increase in duty in the Budget on the 8th of March. Further financial support for overseas activity would also be warmly welcomed.

The BBPA is also developing an export strategy to support the Government’s ‘Food and Drink Action Plan’, helping to chart a path for continued export success as Britain prepares to leave the EU.  The BBPA’s new strategy will stress the need for trade deals post-Brexit, and the importance of a tariff-free trade deal with the EU, Britain’s largest export market, that does not generate additional red tape or barriers to trade for beer exporters. Building on existing IT systems to continue to allow the efficient movement of beer in and out of the UK will also be critical in this regard. This, the BBPA argues, will help ensure that British exporters can continue to grow their European presence in light of strong recent growth. The strategy will also focus on where industry and Government can work together to further expand British beer exports. Throughout the strategy, there will be a continued focus on how the BBPA can support its members and the wider brewing industry.

Brigid Simmonds, Chief Executive of the BBPA, comments:“It has been a great year for British beer exports, but we can certainly do more.

“Continuing tariff-free access to our biggest market is essential as we leave the European Union, and our new export strategy will underline this. In addition, our strategy will set Brexit as an opportunity for Government to move towards a more competitive tax regime, which will help brewers invest and trade in developing markets around the world.

“It is vital, that given these challenges, the Government shows its support for our brewing industry, which produces beers that are sought after the world over. This is why we are calling on the Chancellor to cut the duty rate by one penny in the Budget on 8th March.”

Tim Wilmot-Smith, of Bedford-based Charles Wells Brewery, adds:“Charles Wells has been successfully exporting beer to Canada for over 25 years. In an ever-changing market, we have seen our two most popular brands, Wells Bombardier and Wells IPA, both achieving double digit growth. We have also launched Charlie Wells Dry Hopped Lager across Canada, after successful discussions with the Liquor Control Board of Ontario (LCBO), the world’s largest liquor buyer, with support from the BBPA and UK Trade and Investment personnel.

“It’s important that, as a business, we can continue to invest in our products and our export activities to make the most of opportunities for British beer across the world. That’s why we’re supporting the BBPA’s calls on the Chancellor to support the beer industry at the Budget on 8thMarch.”

Bob Hogg, Innis & Gunn International Business Development Manager, comments:“China is one of the fastest growing beer markets in the world, and we are incredibly excited to introduce our unique range of quality craft beers at a time when there is significantly increasing demand in the category.  Through in-market knowledge and learning, and developing our understanding of the emerging dynamics such as distribution channels, consumer tastes and the competitor landscape, our approach in partnership with our importer and distributor Dxcel will be tailored to fully realise the potential to grow our business in the market, ensuring the Innis & Gunn portfolio meets the needs of both trade and consumer.”