The Society of Independent Brewers (SIBA) has called on the chancellor to expand the draught duty relief to 20%, throwing a lifeline to the struggling pubs and hospitality sector.
Under changes set to come into effect on 1st August, draught pub products, such as beer and cider, will receive a 5% duty discount in an effort to encourage pub-going and support the industry.
But SIBA says the new policy doesn’t go far enough, and a more substantial cut of 20% is needed to encourage people to support their local community pub rather than drink at home.
“The draught duty discount is a hugely positive move by the government, but in order to act as the lifeline for community pubs and small independent brewers it is intended to be, the chancellor must go further and invest in this vital industry with a more generous 20% discount,” said SIBA chief executive, Andy Slee.
“This would represent a real investment by government in SME businesses in communities all across the UK, and provide a shot in the arm for a struggling hospitality sector.”
The Chancellor is due to decide on duty rates which apply from 1st August in his spring Budget, on 15th March. Raising the duty relef rate from 5% to 20% would entail a £400m, rather than £100m, investment.
“Pubs and brewers pay far more than their fair share of tax,” said Andy. “In fact, breweries are the most taxed part of the UK economy as a share of turnover, and the expansion of the draught relief could be a huge help to thousands of small businesses.
“By supporting draught beer in pubs, the chancellor is also helping the small independent breweries who supply them, improving sales and encouraging more people to enjoy a draught beer in their local.
“This is particularly important for fresh cask beer, which can only be purchased in pubs, the majority of which is produced on a small scale and often by local breweries.”
The vast majority (80%) of the beer traditionally produced by small breweries is sold in local pubs within 40 miles of the brewery.
The hospitality sector remain under intense pressure from the lingering impacts of the Covid-19 pandemic and the combined energy and cost of living crisis.
Nearly 400 pubs closed for good in 2022 in England and Wales, and the number of pubs in the UK has fallen 25% since 2000. The UK also lost 160 active breweries during the pandemic, and in 2022 80 small independent breweries closed for good.