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The budget has come and gone and, as expected, it's left the brewing industry counting the cost of further punitive rises in the price of making and buying a pint. No change from the Chancellor on the previous Labour policy but it does leave an increase of 7.2% more in beer duty following Osborne's budget which retained the beer tax escalator.
You would expect condemnation from all sections of the brewing industry. And there has been. The Society of Independent Brewers, SIBA has called it "a real kick in the teeth to the local brewing sector". The British Beer and Pub Association called it a "hammer blow to pubs and clubs" which "hampers growth". CAMRA called it "incredible" that British Beer drinkers have to "endure the second highest rate of beer tax in Europe".
However, some people in the brewing industry came out in support of the retention of the tax escalator. Brewdog's James Watt said, "At BrewDog we wholeheartedly back the rise in the duty on beer," Watt went on "The faceless, monolithic corporations who cowardly discount their supposedly ‘premium’ industrially brewed lagers are slowly suffocating the UK beer industry. The increase in duty can only make it less profitable for them to sell their beers at completely irresponsible prices and decrease the huge impact this has on society as a whole. As part of a society and a community they have a responsibility to people, which they have been ignoring for far too long in the name of profits and corporate greed."
"Yes, the increase in duty will make beer, including BrewDog products, more expensive, but we feel this will help craft beer continue to carve a more significant position in the industry. If someone has to pay slightly more for their beer, they expect more from it – any industrial, chemical ridden, insipid mass-market lager will only leave them disappointed." Watt said.
BrewDog also feel that the increase in duty will help "catalyse" the "UK craft beer revolution".
Eh? Run that by me again. By making beer more expensive, it will encourage more people to put their hands in their pocket and buy more beer?
Does Watt really think that beer is a product with price elasticity similar to a Giffen Good - a good which people consume more of as the price rises?
What planet is he on?
Since 2008 the price of beer has increased by more than 30%. The price of a pint has never been higher and people's incomes in these tight fiscal times have never been more stretched. Increasing the price further will surely lead to more people cutting back on their trips to the pub. This has the consequence of more breweries and pubs going to the wall and jobs being lost.
But, hey, as long as it helps the "UK craft beer revolution' and gets BrewDog some newspaper column inches along the way, that's ok then?
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Well, BrewDog will never knowingly pass up on an opportunity to piss off others in the brewing industry, will they?
ReplyDeleteAnd, of course, if you're producing an "exclusive" product it becomes more exclusive the dearer it gets. BrewDog - reassuringly expensive! ;-)
You do realise this is just their usual way to get headlines. And it clearly works :)
ReplyDeleteWell, I've bought my last bottle of BrewDog. I guess with beer getting more expensive, they'll understand if people have to buy one less beer.
ReplyDeleteJust because a view is not conventional, does not make it wrong.
ReplyDeleteCraft beer offers much better value for money than generic beers. A price increase across the board will make people realise this and get more people drinking good beer.
@James,Brewdog
ReplyDeleteJames,
what other UK brewers do you consider to be part of your 'UK Craft Beer Revolution'?
Have you asked them what they think of the 7.2% increase in duty?
You can see where they are coming from - if all beers cost £10 a pint then only the best beers would get drunk (maybe why BD does a roaring trade in Scandinavia).
ReplyDeleteBeer should be taxed and taxed heavily. Cheap alcohol contributes massively to filling up our A and E depts and police cells yadda yadda. Would it really be a problem if Britain drank less fosters? We just need to make sure consumption of quality beer rises so that's where the government needs to look at tax relief and bureaucracy to make those businesses more profitable and where those businesses themselves need to continue to up their game.
If all beer cost £10 a pint then most beer drunk would be home brew.
ReplyDeleteI do wonder whether BrewDog have "jumped the shark" on this one.
Johnson,
ReplyDeleteWhat utter bollocks. Yes beer should be taxed, I don't anyone would disagree. The problem is that beer is taxed at a disproportionate rate to wine, spirits and tobacco.
Beer is cheaper than water in the Czech Republic and do you see wild binge drinking and maxed out casualty wards? Not in the slighest.
The problem isn't the cost of booze, rather the irresponsible glamourising of going out and getting wankered.
@johnson
ReplyDeleteIf beers cost a tenner a pint, no beers would be getting drunk. you assume that people will consume beer in the same quantity regardless of the price. Indeed, you assume that people will drink more 'quality' beer simply because it's more expensive. To be fair, mate, that's nonsense.
If beer price rises, consumers will simply substitute beer for something cheaper. Maybe wine but more likely a cheaper beery alternative. The very brands and products that BrewDog say will lose out due to the rise.
In this instance, BrewDog are wrong and they have alienated and pissed off a great deal of beer drinkers and fellow brewers and breweries in the process.
Who are these 'UK craft brewers' that they say are part of the 'UK craft beer revolution'? I'd like James from BrewDog to tell us.
Does he speak for these people? Are they in agreement with BrewDog's 'wholehearted' support for this rise in beer duty?