Beer Duty / Brewing / Culture & Tourism / Employment / General / Pubs / Supply Chain / 29 September 2014

Conservative party conference – good news for Chancellor, with beer Budget cheer

The British Beer & Pub Association (BBPA) has released its ‘Cheers 2014’ report, detailing how consecutive beer duty cuts have created 16,000 jobs and boosted beer sales, at very little cost to the Government. The report, produced in partnership with CAMRA and SIBA, was presented to Chancellor George Osborne at the Conservative Party Conference, along with a new, special-edition beer, ‘George’s Budget Booster’, to celebrate the benefits of the duty cut.

On the report itself, the BBPA commissioned Oxford Economics to examine the impact of the Budget decision to discontinue the beer duty escalator and cut two consecutive pennies off a pint in 2013 and 2014. It is forecast that by next year an additional 16,000 more people will work in the sector than if the escalator had remained in place.

The successive cuts have boosted beer sales by over 500 million pints, and channeled an extra £44 million in capital investment (alongside over £400 million already planned) into the brewing and pub sector.

Duty cuts have led to renewed optimism across the sector. The BBPA surveyed brewers and pub operators after the March 2014 Budget to assess the impact of the Chancellor’s decision. Over three-quarters of respondents intended to launch new products, across both beer and pubs, directly as a result of the cut in beer duty.

The wider supply chain and economy is also benefiting markedly. In the BBPA survey, over 90 per cent of respondents intend to increase their investment in the UK.

The report also indicates that price increases have slowed since the escalator was removed. Since the Budget, prices for bitter and lager have risen by just one per cent.

Brigid Simmonds, BBPA Chief Executive, comments:

“The Cheers report contains really good news, on jobs, on pubs, and on investment in our industry. I hope this boost for our sector results in further action on beer duty in the March Budget. A hat-trick would do very nicely!”

SIBA managing director Mike Benner said, “We were delighted to be able to present the Chancellor with a well-earned British beer, as a token of our gratitude for the two consecutive cuts in beer duty.

“For SIBA’s 800 or so brewers, this year’s duty cut was a second boost to their confidence in the long-term future for British beer, after many years of punitive taxation. With a government that seems committed to a thriving British brewing scene, our members are more comfortable about investing in their businesses, with positive impact on their local economies and employment.”

A number of SIBA brewers contributed comments to the ‘Cheers 2014’ report, explaining how the cut in beer duty has helped their business. This ranges from increasing brewing capacity, buying new equipment, employing new staff, opening pubs and moving into export.

Benner continued, “We hope that the government will continue to support this great British industry with more good news in the 2015 budget. If they are looking for evidence of how lessening a sector’s tax burden can create confidence, investment and jobs, then Britain’s independent brewers can provide it in spades.”

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