Southwold: Adnams chief condemns ‘misguided’ increases in beer duty

THE head of Southwold brewing company Adnams has accused the Government of pursuing “misguided” policies on beer duty which he claims are hitting jobs within the pub trade and the revenue collected by the Treasury.

Jonathan Adnams made the comment’s in his chairman’s report, published today as part of the company’s interim results.

Although Adnams reported an increase in beers sales, despite a fall in the overall cask ale market, and an improved performance by its tenanted pub estate, it says the Government’s “duty escalator”, involving increases in beer duty of 2% above inflation, is damaging the UK’s hospitality sector.

“The Government seems to be intent upon continuing its misguided policies regarding beer duty,” said Mr Adnams.”The duty escalator has remained in place to the cost of brewers and pubs, not to mention their customers.

“Pubs are important employers and this policy has also imposed a cost on many of our unemployed younger generation who are being denied the jobs that they might otherwise have had in the hospitality industry.”

Mr Adnams said the duty escalator had also widened the differential between UK duties and those of other countries, with the “predictable” result of an increase in duty fraud, now estimated to be running at �500million a year.

Rather than addressing the root cause of this fraud – the duty escalator – the Government was considering the introduction of duty stamps on bottles (so as to be able to identify beer exported from the UK and then re-imported) which would impose further costs on the brewing industry.

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And Mr Adnams claimed that the duty escalator had also exacerbated an unfairness for medium-sized brewers such as Adnams, with the duty subsidy for smaller “microbrewers” now worth around �200,000 a year for each brewery eligible.

This was “hugely in excess of what is available in most other European countries or to other small firms in the UK,” he said.

However, Mr Adnams acknowledged there had been one positive move on the duty front with the introduction of a 50% duty reduction for beers not exceeding 2.8% alcohol, and Adnams now produced two beers in the category – Adnams Sole Star and Adnams Ginger Beer.