Brewers are under further financial strain after the government rejected a blanket deferral of £750m beer duty payments, due on 25 April, for beer produced in March in a move that has been called a ‘huge blow' to the industry.
The British Beer & Pub Association (BPPA) and other trade bodies had called on the government to defer April's duty payment and those of the following quarter – totalling £750 million – to provide vital cashflow support to the UK's 2,000 brewers who supply the UK's pubs.
Beer duty is chargeable on all beers including ale, porter and stout if their strength is more than 1.2% abv. Although some brewers had been able to secure duty deferments with HMRC through their helpline, this had not been the case for all.
Chief executive of the BBPA Emma McClarkin said that the government's failure to defer beer duty was a "huge blow" to pubs and brewers. "It will put brewers under even greater financial strain, meaning there is a real risk to their ability to resupply pubs when they can safely re-open after the Coronavirus lockdown."
She added: "The chancellor had said he will do ‘whatever it takes' to help, so it's a shame not to see him put his words into action."
McClarkin called beer "our national drink and a key UK manufacturing industry" and pubs a "key part" of the UK's national identity and culture, saying that both pubs and brewers needed and deserved as much government support as possible. "Pubs and brewers will be left bitterly disappointed by this decision."
The BPPA and other bodies believe that if the government had deferred beer duty payments, it would have better enabled brewers to get back on their feet in readiness to resupply pubs after the Covid-19 crisis. The BBPA is now encouraging all its members who need a duty bill deferment to contact the HMRC helpline directly.
Seven in 10 alcoholic drinks sold in pubs are beer and with pubs having been closed since the lockdown in March, 70% of the UK beer market by value has been cut-off to Britain's 2,000 breweries. Last week it was reported that many pub businesses across the country were yet to receive grant funding from local authorities to help them survive the Covid-19 lockdown.