Chancellor Rishi Sunak is reportedly reconsidering the limit set on the size of beer barrels that are included in the new tax cut after coming under pressure from pub industry trade bodies.
Described as “the biggest cut to beer duty for 50 years”, Sunak announced in Wednesday’s Budget a new 5% lower rate of duty on draught beer and cider from 2023. However upon closer inspection the relief only applied to kegs of 40 litres of more – larger than many operators use.
Since the Budget announcement, trade bodies have been putting pressure on the Chancellor to reduce the limit to 20 or 30 litres, The FT has reported. They have argued that the larger size excludes the majority of craft brewers and hands a beneficial cut to multinational producers.
“The 5% draught beer relief is good but the clanger is the size of the container,” said James Calder, chief executive of trade body the Society of Independent Brewers. It is pushing for a reduction in the limit alongside the British Beer & Pub Association and the British Institute of Innkeeping.
The vast majority of craft beer brewed by independent beer producers, who make up about 7% of the brewing industry, is sold to pubs in 20 and 30 litre kegs. While popular beers from large brewers are traditionally sold in a firkin, which is 72 pints or about 40.9 litres.
Lager from multinational breweries is generally sold in 50 litre containers, but pubs have increasingly opted to take the smaller kegs of craft beer to give consumers more choice on the bar, it reported.
A statement from the Treasury said: “We intend for most draught beer for sale in pubs to qualify for the relief, including where it’s made by smaller or craft brewers. We are consulting industry on the criteria to ensure that the relief supports pubs rather than supermarkets, given that smaller kegs are also sold for drinking at home.”
