The government is increasing alcohol duty rates in line with RPI (Retail Prices Index), which will result in a increase to 52p from 50p on the tax charged on each pint of beer.

The 3.9% rise goes against industry calls to freeze duty at its current level and will also impact the price paid on drinks like wine and spirits.

In his first budget, Chancellor John Healey also explained that small alcohol producers make an important contribution to the economy and local communities so the government will increase the relative value of Small Producer Relief “compared to the main rates”.

This equates to providing £10 million per year of support to over 2,000 small alcohol producers across the UK, based on the government’s Alcohol Duty Evaluation report published alongside the Budget.

The government said it will implement a “more generous discount taper for products below 3.5% ABV” and said it is strengthening incentives to produce lower-strength products, and uprate the marginal discount for products between 3.5%-8.4% ABV by RPI+10% from 1 February 2027.

To further support brewers, they said, the government intends to introduce a ‘Guest Beer’ provision in the Pubs Code, covering England and Wales. This will support brewers to continue to gain access to the market, whilst giving consumers a greater choice of beers available at the pub.

IMPROVED MARKET ACCESS

Commenting on the Budget, SIBA said that ans of indie beer “will be toasting the Chancellor’s big pledge for small breweries” as he delivers on expanding access to pubs and improves the generosity of Small Producer Relief.

This relief is used by small independent breweries to invest in their businesses, expand and compete against the global brewers that dominate the sector and today’s announcement will give them a vital boost, they said in a statement.

Andy Slee, SIBA Chief Executive, explained: “Thanks to the Chancellor, pub goers will have a better choice of beers at the bar, including those from local independent breweries. The right to a guest beer will permit landlords in large pub company pubs in England and Wales to sell what customers want, which is a great tasting local beer.

“Accessing the local pubs has been a barrier to growth for independent brewers who say they can’t sell to around 62% of the pubs in their local communities because of restrict market access. This is despite 80% of beer drinkers wanting to see local beers on the bar.

“It was a previous Labour Chancellor who kickstarted the indie beer revolution by launching Small Breweries’ Relief nearly 25 years ago which has now become Small Producer Relief.

“This new right to a guest beer and the extra relief support will hopefully supercharge this revolution, helping them to grow and thrive.

“Lastly it is welcome to see positive changes to Small Producer Relief as it applies to lower strength beer. Small breweries were previously largely locked out of the growing market for lower strength beers because of a quirk of the alcohol duty system.

“By improving Small Producer Relief for them too, it will enable brewers to respond to changing tastes and produce more lower strength beers that don’t compromise on flavour.”

GREATER CHOICE NEEDED

Speaking on the announcements, CAMRA Chairman Ash Corbett-Collins added: “We’re glad that the Chancellor has targeted new measures at small pubs, independent brewers and cider makers, even if the wider picture on beer tax, VAT and energy costs will disappoint many drinkers, pub and beer businesses.”

He said: “The announcement in the Chancellor’s ‘Red Book’ that tied pub tenants in England and Wales will be allowed to serve a guest beer of their choice is incredibly welcome. 

“This could, if introduced properly, help independent brewers get more of their beers onto bars. We’re looking forward to working with the Government to get the details right and deliver greater choice for drinkers.

“The Government need to go further by making changes to make sure we can get decent beers from independent British and Irish brewers in all pubs instead of the same, bland beers from multinational brewing businesses that dominate at the bar.

“The Government must release the full results of their Access to Market Review, first announced two years ago, as soon as possible and make changes giving drinkers a choice of beers that they actually want, and independent brewers get a fair shot at the market.”

MORE NEEDED FROM THIS GOVERNMENT

Emma McClarkin, CEO of the British Beer and Pub Association, said the confirmation of lower business rates for the next two years and an increase in the tax-free thresholds for smaller pubs and high street businesses is something they have worked with Government on, so today’s announcement was a very welcome step in supporting pubs.

She added: “However, when the entire brewing sector is united on calls to lower the cost of doing business, to have a rise in beer duty is troubling as it will undoubtedly push up the price of a pint. And despite our calls to cut red tape, the introduction of yet more regulation for pub companies is disappointing.  

“As the Prime Minister has acknowledged, there is much more to do to back our Great British pubs and pints and we support this ambition. Whilst many were hoping for more today, the expectation to deliver more remains.

“We will continue to work with Government to transform the opportunities for brewers and publicans, create incentives to employ more young people, keep pints affordable and ensure our locals remain at the heart of our communities.”