A BREWERY owner has warned the government’s proposed tax hike for small breweries could cripple the industry.
Tim Bloomer, co-founder of Fell brewery in Flookburgh, has said the decision to lower the threshold of when breweries begin to pay more beer duty could be ‘a potential disaster’, saying it ‘couldn’t have come at a worse time’ with breweries already struggling to survive the effects of the pandemic.
“A few months ago they announced they were going to review small breweries relief, which means breweries who produce less than a certain amount of beer per year pay half the amount of tax or beer duty that big breweries would pay,” said Mr Bloomer.
“The threshold when you start paying duty the Government has said will now be lowered from 5,000 hectolitres to 2,100 hectolitres of beer annually.”
According to The Society of Independent Brewers (SIBA) the relief ‘allows small professional brewing businesses to compete with global brewers who dominate the marketplace.’
The organisation, who have launched a petition against the plans, said: “The Government’s proposed tax hike could see some of Britain’s small brewers fighting for survival. The proposed changes will mean that over 150 small independent breweries will have to pay more in beer duty, while those larger in size will pay the same amount or even less than before.
“This ‘reverse Robin Hood’ system will put local businesses at risk which have been amongst the hardest hit during Covid.”
“Here at Fell we produce 2,500 hl of beer annually, so we’re right in the sweet spot,” said Mr Bloomer.
“Beer duty is not a small cost for us it is our most significant cost.
“When we sell a pint to a pub a huge chunk of the cost incurred for us is beer duty, it’s far more than ingredients.
“And it will present us with difficult choices if it’s going to be a major increase then it will force a lot of breweries into the red.
“Some may consider not continuing operating and some may increase prices.
“The nature of this tax change is the more you make the more your taxed and so it’s a huge barrier to the desire and will to grow.”
He added: “It couldn’t have come at a worse time; it really feels like kicking us while we’re down.
“Most of trade goes to pubs, their closure has been disastrous for small breweries and a lot of them won’t survive.”
Mr Bloomer, alongside MP for Westmorland and Lonsdale Tim Farron, recently met with SIBA to discuss their concerns and are trying to raise awareness of small breweries’ plight.
The businessman has said it is still unclear how much more tax breweries will have to pay as a result of the changes.
“We’re hoping we can get a reversal but if not, then hopefully we can alleviate the pressures on small breweries.”