Brewers are concerned over government tax hikes

Brewers are concerned over government tax hikes

Garrett Oliver, Brooklyn Brewery's loquacious and inimitable brewmaster, was in full flow on stage at BeerX in Sheffield, England, on Friday (15 March).

“We need to defend beer,” he thundered to the crowd of UK brewing folk, who responded with a round of applause. Oliver - well-known for his eloquent and forceful support of independent brewers  - even pulled out a black T-shirt with the words “Defend Beer” emblazoned in white across the front. Cue more applause.

It was a well-rehearsed speech, and one that Oliver has no doubt made many times before. But what struck a chord with the Sheffield crowd was the sense that today beer, more than ever, is in need of someone to stand up for it.

In January, the French Government raised beer taxes by a staggering 160%, with critics asking why beer was singled out for such a prohibitive charge. In December, the Philippines Government felt secure enough to sign off on a “sin tax” on beer to raise extra funds for healthcare. Irish lawmakers, meanwhile, have increased beer duty by 20% while in Russia the excise tax on the beer industry has quadrupled since 2009.

In the UK, all eyes are on tomorrow's Budget, and whether chancellor George Osborne will scrap the controversial beer duty escalator. The system has meant alcohol tax has automatically been raised 2% above inflation each year since 2008. It seems likely the escalator is here to stay, with the Coalition unwilling to cancel a policy dreamt-up by the previous Labour administration. It may be deeply unpopular within the beer industry, but it can always be blamed on the other guys.

Brewers, however, looking elsewhere across the political spectrum for support on this issue may look in vain.

Speaking a few hours before Oliver, Labour MP Toby Perkins, could be regretting his decision to open the floor to a Q&A. Perkins, shadow minister for small business, took two questions, both of which were about whether his party would ditch the tax. Spluttering that the country was facing a “big budget deficit” and that “we have got to try and get the balance right”, Perkins made the same noises as BeerX's other political speaker, minister for UK pubs Brandon Lewis.

“I'm not the chancellor,” Perkins stated baldly. “There are other industries asking for drops and other pressures from other places.” 

With none of the main political parties fighting their corner, it's little wonder brewers rally around the flag of those like Oliver, who remain resolutely positive that beer is something to be protected, and not punished.

It is easy to forget, then, that governments don't always play such a negative role in beer. Despite grumblings over the political scene, BeerX was a resounding success, with the Sheffield exhibition hall packed with brewers and suppliers enjoying the sector's relatively rude health. Garrett Oliver's presence was a reminder, too, that it is a global success story as beer drinkers in the US, Europe and increasingly in countries such as Brazil and Mexico develop a taste for small, independent brews.  

In the UK, as just-drinks columnist Larry Nelson pointed out this month, the number of microbrewery openings has doubled in the past decade thanks to the Labour Government's progressive beer duty, where the smallest of producers received a 50% reduction in standard rates.

It is not as if the politicians aren't aware of the benefits of a strong beer industry - MP Lewis praised the “strong case” groups such as BeerX organisers the Society of Independent Brewers (SIBA) have made against the escalator and that local brewing is a “good news” story as it is creating jobs, particularly for under-25s.

This is clearly not enough, though, for Oliver's army of delegates cheering his call to arms, or for the industry's representatives, who have fought hard against the duty escalator and the impact it is having on brewers.

“What we want (the politicians) to do is to go over the line on this issue,” SIBA chairman Keith Bott told me on the sidelines at Sheffield. “We want them to go over the line and do something that we see is important to society.”

Or to put it another way, Defend Beer.