What is the problem?

The current design of SBR has led to an unexpected, and worsening, market distortion that is a real barrier to growth and threatens the long term future of the independent brewing industry.

It has created a level of volume output at which brewers get the benefit of both the SBR and some economies of scale. The brewers below that volume output can’t compete on a level playing field so are held back and unable to grow. Brewers with a slightly larger output are also unable to compete on a level playing field, even though they have invested to achieve economies of scale. This has led to a perverse incentive for these brewers to reduce rather than expand production. Each increase in excise duty worsens this tax anomaly and discourages more brewers from growing.