What does the budget mean for the brewing industry?

“The Chancellor has spent an extraordinary amount of taxpayer money to help keep the economy moving and protect jobs, pledging nearly £ 59 billion for policies such as extended holidays, continued cuts in business rates, hospitality grants of up to £ 9,000 and a range of investment initiatives, “said James Calder, managing director of the Society of Independent Brewers (SIBA).

“While this is useful for the vast hospitality sector, it does nothing for the struggling independent breweries in the country, which were in desperate need of direct tax cuts and targeted subsidies to help them survive until. the reopening of the economy. What is the point of helping hospitality if there are no dynamic, varied and local beers when the economy reopens?

“As a result of the announcements, more breweries are more likely than ever to close, just as there is light at the end of the tunnel,” he continued.

“Wet breweries and pubs will not benefit from the extension of the VAT reduction because it does not apply to alcohol. Breweries will continue to pay full business rates, VAT and tariffs and will not receive a specific subsidy – and while the freeze on beer duties is welcome, the Chancellor still intends to increase the tax bill of at least 150 small breweries from next January with ruinous changes. to the aid of small breweries, jeopardizing jobs and the recovery. “

Disappointment with breweries in difficulty

Calder went on to explain how the payback loan program, which advances the coronavirus business interruption loan program and rebound lending, will benefit breweries and many will benefit, but continue to put them in debt, rather. than to support them directly, which inhibits growth and investment in the sector for years to come.

‘Start-up grants of up to £ 18,000 per host business will help businesses plan, but again it doesn’t appear that breweries are automatically included in the definition, so are at the mercy of discretionary grants “, he added. the authorities can grant aid to companies, but no. We can do this in weeks, others in months.

“The announcement of the ‘super deduction’ policy, granting companies that invest in new qualifying plant and machinery a 130% capital deduction on their tax bills, may be beneficial, but the details of the taxes that may be offset are not yet published.

“While this budget is likely celebrated by the entire hospitality industry, it is a disappointment for the country’s struggling small breweries and their supply chain, which have once again been de-prioritized by the chancellor.

Phil Whitehead, managing director of Molson Coors Beverage Company for Western Europe, welcomed the extension of the holiday program, additional subsidies, trade rate relief and a 5% VAT rate, but stressed how much short-term support was the freeze on beer duties.

“When we can finally enjoy a pint with friends in our favorite local, we will still suffer the impact of a beer duty which is 11 times higher than in Spain and Germany and three times the average of the EU, “he said.

‘The introduction of a level playing field alcohol duty system for UK brewers as part of the alcohol duty review, as well as the long term reform of the corporate rate system , is a critical part of the longer-term structural support needed to give business owners, including brewers and pub operators of all sizes, the confidence and stability to invest for the future. “

Level the playing field

British Beer & Pub Association director Emma McClarkin echoed Whitehead’s comments on the alcohol tax freeze as temporary relief.

“Having called for a reduction in beer duties and being a strong supporter of the Long live the localA freeze on beer duties will be seen as a much needed short-term relief for the industry, ”she said.

“However, the Chancellor only partially listened to the 500,000 campaign supporters who signed the petition calling for a reduction in beer rights.

“We now hope the government will use the ongoing alcohol duty review to reduce beer duties to support our brewers and pubs and level the playing field with other brewing nations. The government must support and promote the extraordinary British brewing and brewing sector in the same way that other governments support their domestic industries.

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