Increased duty on two out of these three...
Something I noticed while reading the HMRC document assessing the (then proposed) impact of the High Strength Beer Duty. In the assessment of the changes, it states under “Other Impacts”
The reduction in consumption of high strength beer resulting from these measures is likely to have a health benefit.
Small breweries will not be significantly impacted upon, as beers over 7.5 per cent abv represent only 2 per cent of their total production.
There is no adverse impact on competition as all producers and importers of beer with a strength exceeding 7.5 per cent abv are liable to the new duty for high strength beers.
I’m not sure this is all correct.
- The change was designed to ‘reduce the availability and affordability of “super strength” lagers associated with problem drinking’. If the change is likely to show health benefits, you need to also increase the tax on super-strength ciders, wine and spirits to make those less affordable. An alcoholic will either not care about a price increase (it is an addiction that they must satisfy), or will move to drinking other cheaper forms of alcohol. A 2 litre bottle of cheap cider is way cheaper than most equivalent beers anyway. Putting a sensible minimum per unit price and preventing the sale of alcohol at lower than cost would have far more effect.This also seems to be a little narrow minded in the definition of “problem drinking” – in no way does this impact the person who causes trouble/gets themselves into trouble/difficulty after necking 10 pints of strong lager (~5% ABV) in a club/pub.
- While small brewers may only have 2% production of strong beers, it doesn’t take into account that some breweries specialise in these products and are likely to have an increased percentage of high strength beer production compared to the norm.
- The duty payable by a large brewer (>60000hl/yr production) has just increased by 25%. For a small brewer (<5000hl/yr), the duty payable on the same beer, though still less than that of the large brewer, increases by a whopping 50%. Given the way profit margins work, and the likely lower margins for a smaller brewer, how does this represent a level playing field for all brewers?
If you’d like to have a play with a spreadsheet I generated to work out what duty is payable on your beer, try this out: Beer Duty Spreadsheet (.xls) (NB: I believe this spreadsheet to be accurate as of 26-Oct-2011, but this should not be used for any official duty purposes! If you spot any errors, then please let me know!)
And, if you haven’t already, get over to http://epetitions.direct.gov.uk/petitions/18346 and sign to campaign against the duty.
Photo attribution:
6-8-10 / Smabs Sputzer / CC BY 2.0
Entries (RSS)
Well put. I’ve linked back to you from my post.
Nice coherent analysis.
Simple and effective spreadsheet as well.
Thanks guys. Another thing which becomes obvious from the spreadsheet, which is perhaps a bit of an issue for brewers:
Your beer is nominally 7.4%ABV, and so comes under the HSBD barrier. For some reason, you have a batch that attenuates somewhat more than usual and that batch (according to the refractometer figures) comes out at 7.6%. NB: according to brewers, this is permitted for labelling purposes where you have 0.5% tolerance on the stated ABV.
As a result, that single batch costs the brewer about £40/hectolitre in duty (depending on total yearly output) more than another batch that came in at the expected ABV. I’m fairly sure that was not intended at all when dreaming up this change…
[...] http://blog.buntingfordbrewery.co.uk/?p=202 http://www.camrgb.org/7point5/ http://www.chromosphere.co.uk/2011/10/26/high-strength-beer-duty-some-thoughts/ [...]