Monday, 15 February 2010

I'm Backing Beer (obviously!)

An unashamed corporate plug that I feel very passionate about - if you feel the same then join in.

For too long, beer has been competing with major cider brands with one arm tied behind its back – a tax legacy of a bygone era when most cider was produced in small craft presses in the West Country; a very different picture to the highly efficient, brand led industry of today.

It’s time to level the playing field to ensure beer can compete fairly.  The Chancellor indicated his willingness to address this question when he announced a review of cider duty ahead of the next budget, in March 2010.  There are no foregone conclusions, however, and we need to ensure that a clear case for beer stands out in the duty debate.

We want our local MPs to understand the issues around duty and have the opportunity to lend their weight to the case for a level playing field for beer.  All you need to do to send a letter to your local MP is click on the link below, follow the simple instructions and an MP letter will be automatically generated for you…..

A simple action that could make an enormous difference. Am not sure that the link will work for people outside of Molson Coors. If it doesn't here's the letter, why not send a copy to your MP. 

Dear ,


As one of your constituents, I am contacting you to ask for your support of Britain's brewing industry which is being threatened by daily pub closures and an uneven duty playing field for beer.

As a brewing employee, I also wanted to make you aware of some of the anomalies which prevent fair competition between beer and cider brands in the UK.

Brewers are willing to compete on a level playing field, but cider's 29p per pint tax advantage over beer (at 5% ABV, which is the average of all cider sold in the UK) has subsidised an unfair marketing advantage for too long, encouraging beer drinkers to switch brands and exacerbating the decline in beer sales. In fact, 70% of new cider volume in 2009 came as a direct switch from lager, yet the major cider brands pay less than half the duty rate paid by lower ABV major lager brand competitors.

Indeed, if cider brands paid duty at the same rate as beer, Government duty revenue from the 8m hectolitres of cider sold in 2008 would have increased by more than £400 million.

I understand the low rate of cider duty was justified to support small apple growers and cider makers in the West Country and I appreciate the need to create a workable way to protect craft producers. We believe that small cider makers should benefit from a relief mechanism similar to the Progressive Beer Duty system which has provided a welcome stimulus to microbrewers across the UK, since 2002.

However, this requires us to recognise that the structure of the modern cider industry is very different - with the vast majority of UK cider sales now being efficiently manufactured by two multinational drinks companies, accounting for more than 8 in every 10 pints of cider sold in Britain's pubs. Surely it is not the intention to subsidise these large scale manufacturers at the expense of Britain's brewing sector?

As you will be aware, beer duty increases in line with ABV, whereas cider has a flat rate to 7.5% ABV. In practice, this means that 4% beer pays over 37p per pint versus cider at 18p and a 5% beer pays 47p per pint versus cider, still at 18p per pint. I find it especially alarming that a 7.5% alcohol cider should pay only 18p per pint duty when the equivalent ABV beer attracts a duty rate of 70 pence per pint.

I want to see beer and cider duty rates aligned at the next budget to ensure fair competition between beer and cider brands and to help to promote a sensible drinking culture.

This would provide a much needed boost to UK brewers and barley farmers, close the loop hole that allows the sale of extremely cheap white ciders and substantially increase duty revenues to the Treasury over the coming years.

I am aware that the Chancellor of the Exchequer is reviewing cider duty ahead of the next budget and wanted to ensure you understood a brewing employee point of view so that you can contribute fully to the debate and lend your weight to the argument for a fair and level playing field for beer.

Yours Sincerely,

4 comments: said...


Woolpack Dave said...

Ah, yes. This is something of an anomaly, although I would worry that spirit and wine producers might make the same argument at the detriment of beer.

Tandleman said...

Assuming the rate of duty was to protect small producers, this seems on the face of it an anomoly which could be corrected with a sliding duty thingy to ensure small producers aren't wiped out. I don't actually know enough about it to be sure, though the fact that cider often sells for more in the pub seems to indicate something is wrong.

Don't feel strongly enough to write a letter - or send a pro forma - but will be interested in the counter arguments as I'm sure there will be some.

PS. What about apple growers? Are they part of the reason?

Cooking Lager said...

Why protect "craft" producers of anything? Why support small scale economic inefficiency in any endevour?