Budget 2024: beer sector responds

The brewing sector has welcomed the alcohol duty freeze until February 2025 in the Spring Budget, but there was also regret about the potential for more action.

In response to the chancellor’s announcement, the Campaign for Real Ale chairman Nik Antona described the Budget as a “missed opportunity” to support the Great British pub by cutting tax on draught beer and cider.

But Antona welcomed the freeze in alcohol duty, as it would help to “mitigate an additional hike in costs” to be passed on to pubs and pub-goers.

He said: “Making duty on draught beer and cider significantly lower would promote drinking in the regulated setting of a community local and help small and independent producers who sell mainly into pubs and taprooms to compete against the global brewing giants and the likes of supermarket alcohol.

“CAMRA will continue to campaign for the Treasury and all political parties to back our sensible ask of making tax on pints in pubs 20% lower than the general duty rate.”

He also said that the VAT threshold change, from £85,000 to £90,000 would “not benefit the majority of pubs, breweries or cider producers”.

Antona added: “Cutting VAT on all sales in the hospitality sector would have been a simple way to support consumers and beer and pub businesses in all parts of the UK – helping to keep the nation’s pubs, social clubs and breweries alive and thriving at the heart of communities and local economies.

“The chancellor should still consider cutting VAT for these businesses to ease the significant financial burdens on the sector and help to reduce the rate of pub and brewery closures which deprive consumers of community pubs and choice of local beers.”

Breweries

Chief executive St Austell Brewery, Kevin Georgel, welcomed the decision to extend the freeze in beer duty but added it “will not see costs cut for our sector”.

He said: “The UK still has one of the highest levels of beer duty in Europe – 12 times higher than Germany. We would therefore like to see the government set out a roadmap to bring current duty down to the European average.

“Great British pubs are at the heart of their communities, but they remain over-taxed and under increasing pressure due to the impact of inflation, the cost of living, reduced footfall, and high operating costs. This was not addressed in today’s budget. We therefore urgently need the long-term reformation of business rates, a VAT cut, and more meaningful government support to reduce the tax burdens on our sector – one of the UK’s leading employers and social and economic contributors.”

Tangible difference

Carlsberg Marston’s Brewing Company (CMBC) CEO Paul Davies said the firm was “pleased” that the chancellor had “listened to the beer and pub industry”, and that a duty rise would be “hugely damaging”.

He said: “Today’s announcement that duty will be frozen until February 2025 will make a tangible difference to hospitality and the brewing sector, as our industry continues to adapt to a challenging operational climate which has seen many pubs sadly closing their doors in recent months.

“As we look ahead to a General Election, we call on the Government, Opposition and for all parties to show their support for our sector in the coming months to protect the UK’s proud pub culture and the crucial economic and social benefits that it brings to communities across the country.”

Affordable treat

The news was also welcomed by the managing director of Surrey’s Hogs Back Brewery, Rupert Thompson, who described the duty freeze as “very welcome”.

Thompson said: “A pint of beer in the local should be an affordable treat, not an expensive luxury.

“We’re pleased that the Chancellor acknowledged the enormous value of pubs to British society in his speech. Pubs provide the only route to market for draught beer, particularly cask ale. It’s something that they can uniquely offer to their customers, so are vital to us as a brewer.

“Without thriving pubs, cask’s future looks very bleak, which would be a tragedy for this uniquely British beer, the many drinkers who enjoy a pint of it in their local, and the thousands of people employed by local breweries.”