Brewers and consumers have acted angrily to the news that a government review of beer excise duties has been postponed until the autumn. The review was announced in the autumn 2021 budget with the aim of reducing the number of main duties from 15 to six.
Both CAMRA and SIBA, the Society of Independent Brewers, called for lower rates of duty for draught beer to enable pubs to claw back some of their lost sales to supermarkets.
Both organisations also called for a revision of the 5 per cent cut in duty announced in the budget that applied to beer sold in containers of 40 litres or more. It was pointed out to the Treasury that 34 per cent of licensees stock containers of fewer than 40 litres and one in 10 venues don’t have cellar space for large containers.
Following the budget announcement in parliament, the then chancellor Rishi Sunak and Prime Minister Boris Johnson were seen heaving beer containers at the Fourpure Brewery in Bermondsey. But the photo call fell flat when it was pointed out that the containers held by the politicians were 30 litre ones that would not qualify for the duty cut.
CAMRA and SIBA have been joined by UK Hospitality and the British Beer and Pub Association in urging the government to bring forward its review and to lower duty on draught beer.
CAMRA is also taking action on a review of the Pub Code and is asking tenants of pub company tied houses to share their views on how the code is working. The code aims to regulate the relationship between tenants and pubcos. It was brought in by the government when self regulation regimes put in place by pub owners were found to have fundamentally failed.
The review of the Pub Code has been launched by the Department for Business, Energy and Industrial Strategy and will cover the period April 2019 to March 2012. CAMRA is calling on tenants to give feedback to the department on how they think the code is working using an online survey:
The survey follows a disturbing meeting of parliament’s Business, Energy and Industrial Strategy Committee, chaired by Darren Jones MP on 12 July. The meeting was attended by representatives of Star Pubs & Bars (Heineken UK), Stonegate, Punch Taverns and Marston’s to discuss how MRO was working. MRO stands for Market Rent Only, a system whereby tenants tied to pubcos can apply to go free of tie and choose their own beers in return for a review of their rents.
Star Pubs & Bars said that they own 2,400 pubs and just 54 of their tenants had chosen MRO.
Stonegate, Britain’s biggest pubco that took over the estate of Enterprise Inns or EI, said it has 4,500 pubs and just 17 have applied for MRO.
Punch has 1,200 pubs and 14 tenants have MRO. The representative said 18 per cent of its tenants had applied for MRO but only 3 per cent had chosen to proceed.
Marston’s has 2,700 pubs, 590 had applied for MRO and 142 had opted for MRO following discussions. Marston’s has a different business model to the other companies as it’s a brewer as well as a pub owner and is now part of Carlsberg Marston’s.
All the representatives said tenants who gone ahead with MRO had had an increase in their rents.
Darren Jones said there had been “a big drop off in the number of tenants applying and accepting MRO”, implying a lot of arm twisting had gone during discussions.