Pub and beer groups have welcomed Chancellor John Healey's Budget measures supporting London's small pubs and independent breweries, despite a rise in beer duty that will increase the price of a pint.
Support for small pubs and breweries
Healey used his Budget speech to announce an increase in the threshold for small business rates relief for hospitality businesses from £12,000 to £18,000. He also confirmed £10 million in alcohol duty relief for about 2,000 smaller British brewers and cider makers.
The Campaign for Real Ale (Camra) said the "targeted" measures aimed at small pubs and breweries were welcome. Emma McClarkin, chief executive of the British Beer and Pub Association, said: "The confirmation of lower business rates for the next two years and an increase in the tax-free thresholds for smaller pubs and high street businesses is something we have worked with Government on, so today's announcement is a very welcome step in supporting pubs."
Beer duty rise criticised
However, both Camra and McClarkin's association were critical of the decision to increase beer duty, meaning a tax rise on pints served at the pub. The Chancellor said alcohol duty, which is charged on every pint sold, will rise in line with Retail Prices Index (RPI) inflation, which stands at 3.9%. This will push up the duty on a pint from 50p to 52p.
McClarkin called the rise "troubling" and said it would "undoubtedly push up the price of a pint". Ash Corbett-Collins, Camra's chairman, said: "At a time when many pubgoers, pubs and brewers are struggling to make ends meet, increasing taxes on pints in pubs is the wrong decision."
London's independent breweries to benefit
The Society of Independent Brewers and Associates (Siba) praised Healey's support for small-scale beer and cider producers by making the Small Producer Relief more generous to the tune of £10m. The capital could be a big beneficiary of the relief. Camra calculates that London is home to more than 80 independent breweries, with the so-called "beer mile" in Bermondsey, south London, and Blackhorse Road, east London, both major draws for beer lovers.
Siba said: "Fans of indie beer will be toasting the Chancellor's big pledge for small breweries as he delivers on expanding access to pubs and improves the generosity of Small Producer Relief. This relief is used by small independent breweries to invest in their businesses, expand and compete against the global brewers that dominate the sector and today's announcement will give them a vital boost."
Guest beer freedom for tied pubs
The "Red Book", which contained extra detail about the fiscal measures, revealed new freedoms for tenants of pubs tied to a brewery. Those in England and Wales will be permitted to serve a guest beer of their choice, the Treasury said. Camra's Corbett-Collins said the move could "help independent brewers get more of their beers onto bars".
The guest beer change would mean "a better choice of beers at the bar" for punters, giving local independent breweries more of a look in, Siba added. "Accessing the local pubs has been a barrier to growth for independent brewers who say they can't sell to around 62% of the pubs in their local communities because of restricted market access," it said in a statement. "This is despite 80% of beer drinkers wanting to see local beers on the bar."
The Budget also ironed out a "quirk of the alcohol duty system" that "largely locked out" small breweries from the growing market for low strength drinks, according to Siba. The reform will "enable brewers to respond to changing tastes and produce more lower strength beers that don't compromise on flavour," it said.
Camra said more action to help beer and pub businesses "with sky high energy bills" and increased employer national insurance contributions was missing from the Budget. "The lack of action on all of these issues will only contribute to more otherwise viable pubs having to call last orders for good," said its chairman.
