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SIBA calls for further cut in beer duty

In a detailed submission to Government, SIBA which represents over 840 British breweries, has called for a fourth consecutive cut in beer duty in the Budget on March 16th. The call for a further drop in beer tax comes as new research by SIBA shows how the independent craft brewing industry has grown as a result of previous cuts in duty.

Mike Benner, SIBA Managing Director said “The independent craft brewing industry is a British success story which needs further support to reach its potential. Beer duty cuts in the last three Budgets together with the scrapping of the beer duty escalator in 2013 have funded investment and growth creating jobs in local communities across the UK. British beer drinkers now have access to many thousands of excellent beers from British breweries of all shapes and sizes. SIBA is urging the Government to continue to support this important industry with a fourth consecutive beer duty cut in 2016.”

In their twenty-three page submission to Government, SIBA highlight a number of positive effects beer duty cuts have had on the independent brewing sector including on local jobs, investment and growth.

This is important when considering that seven out of ten alcoholic drinks sold in pubs are beer and over 80% of the beer sold by SIBA members is consumed in pubs within 40 miles of the brewery which, SIBA says, shows a close link between independent brewers and local pubs, to the benefit of communities and local economies.

SIBA also highlights the creation of jobs throughout the beer and pubs sectors – Almost 900,000 jobs are supported by the entire industry including in pubs and the supply chain, with SIBA’s brewery members saying the cuts have allowed them to grow their businesses. Compare this to the period before the recent duty cuts where the scrapped beer duty escalator – which added 2% above inflation to beer duty year-on-year – caused breweries to consider scaling back their production due to rising costs.

Cairngorm Brewery explains how the beer duty cuts have helped their business. Sam Faircliff said,  “We were on the verge of cutting back production in order to get control of the beer duty costs.  We now employ 24 people at Cairngorm Brewery following the reduction in beer duty rates – this has resulted in 7 additional jobs in the last three years.”

Mr Benner added, “Our members are confident about the future following the support three duty cuts have provided. Over 70% of our brewery members have made significant capital investments in 2015, a fifth over £50,000; a large investment for small businesses and something which has been helped by the duty cuts. Almost three quarters of our members expect to create at least one new job in 2016 and many of these will be in deprived local areas.”

Independent craft beer brewed by SIBA’s members has increased in production by 15% between 2013-2015, significantly higher than in previous three year periods. This has created more choice for consumers across the UK looking for high quality, independently brewed and distinctive beers.

“The growing interest from consumers in craft brewed beer, together with renewed confidence due to duty cuts, has fuelled innovation and investment in the brewing industry. While 77% of SIBA member production is in cask, the production of craft beer in keg has more than doubled from 2013-15 and is expected to rise again in 2016. 27% of our members now produce some beer in keg, which together with the increased use of craft cans and bottles promises to open up a whole new market for craft-brewed British beer throughout the pubs and wider hospitality industry” said Mike Benner, SIBA Managing Director .