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.
The need for reform, summarised:
Small Brewers Relief (SBR) is 16 years old. The brewing world has changed significantly in that time, its time for SBR to catch up. Urgent reform is needed.
SBR is acting as a disincentive to grow for the vast majority of small brewers, contributing to others massively scaling back production, and unfairly holding back the micro brewers.
SBR needs to be more closely matched with the economies of scale that businesses experience as they grow so that SBR is genuinely progressive and always supports growth and investment.
Every duty increase by the Government increases the unfair advantage given to a select group of brewers.
This situation threatens the whole independent brewing sector and puts the British pint as we know it at risk.
A Treasury review is urgently needed to make the SBR system fairer, encourage growth at all stages of a brewer’s business development, boost exports and provide better value for money for the taxpayer whilst helping save the British pint as we know it.
Agree? Then click here to to send a letter to your MP asking them to urge The Treasury to commit to a review.