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UK: Many British brewers are still losing out on tax breaks given to rivals elsewhere in the European Union.
As announced by Gordon Brown in the budget on March 17, the production limit for tax relief has been doubled from 18,330 barrels (30,000 hectolitres) to 36,660 barrels (60,000 hectolitres), The Publican revealed in a statement. Customs and Excise has confirmed that the change will come into effect on June 1.

Smaller brewers have in the past recouped the costs from the sliding duty scale while medium-sized brewers missed out because their production exceeded the cut-off limit.

However, Cumbrian brewer Jennings, one of the companies that in theory benefits from the change, said staying within the production limit would actually hold its business back. Managing director Mike Clayton said the company would only benefit marginally because it expects to exceed the 36,660 barrel limit sometime in the next few months.

Mr Clayton said: “It may release a few thousand pounds that we can reinvest in marketing and promotion, but the only way we could benefit substantially is to restrict production of our beers, which isn’t a particularly attractive option when it comes to growing the business. “What we would like, of course, is for the government to raise the limit to the limit seen in Europe.”

More of the country’s family brewers would benefit if the limit had been raised to 122,200 barrels (200,000 hectolitres), the production level up to which other EU brewers benefits from progressive beer duty.

James Clarke managing director of Oxfordshire brewer Hook Norton, said the company would reinvest its ‘ windfall’ from the duty concession in marketing its beers, improvements to the tied estate, and employee benefits. He said: “We lobbied for the level to be set at the European level. Just once, it would for us to actually benefit from an EU law.”

The British Beer & and Pub Association has estimated that setting the limit at the European level would have cost the Treasury just £3m in lost duty, but would have freed up find for many more smaller brewers to reinvest in their business, so improving competition in the beer market.


19 May, 2004