Friday, 13 January 2012

A question for CAMRA

I have repeatedly complained about the High Strength Beer Duty levied on beers over 7.5%. I still question CAMRA's approach on this matter. On my last writings on the subject it was suggested I talk to CAMRA. I decided to write to Mike Benner, Chief Executive of CAMRA.

I was delighted that he replied. Many will no doubt see his reply as satisfactory. It will probably disappoint, but not surprise those people to know that I don't see it that way.

However, my views have been made and some assurances have been given that my concerns are being addressed. Most importantly I very much welcome that fact that Mike took the time to reply and agreed for his words to be published.



I hope you don't mind me contacting you, a commenter on my blog suggested I should talk directly to CAMRA, and it seems appropriate that I should approach you.

You may be aware that I am one of an increasing number of CAMRA sceptic "noisome" bloggers. Indeed, I suspect you are already familier with the views I wish to communicate. I should also point out that I have held CAMRA membership for some years now, and intend to retain that membership even if I disagree with some policies. I understand that CAMRA must follow policies that are for the benefit of the majority of the membership. I recognise that the organisation's aims are not to provide a blanket beer-related organisation but a cask beer and pub focused organisation.

However, I still feel that it is better to have a general consideration for the wider beer community if we wish not to see further fragmentation within the community.

CAMRA helped to introduce the progressive beer duty system along with strong help from SIBA. Without progressive beer duty it is unlikely that the beer market would be shaped the way it is. There would be significantly less microbreweries and there would very certainly be much less consumer choice.

Part of the choice that has developed is a much wider range of beer with a wider alcohol content. Many of these beers are extremely flavoursome and have revitalised the whole market. This revitalisation has also encouraged many bigger brewers to up their game significantly and further stimulating a broader choice for consumers. The fact that there has been an increase of more flavoursome beers, I would suggest, has helped to contribute to a much more responsible drinking culture amongst the consumers who have been persuaded into this market.

Unfortunately, introduction of the low and high strength beer duty bands is in danger of undoing all of this excellent work. It is effectively undermining the benefit of progressive beer duty. The discount given to small producers of beer is designed to address the fact that stagnation was occurring in the beer market. It was almost impossible to start a microbrewery and remain competitive as the larger breweries had economies of scale which cannot be achieved in the microbrewing sector.

The low strength beer duty discount is benefiting larger producers who already have a competitive edge due to economies of scale. The microbrewers cannot take advantage of any further discount. This is resulting in the very large breweries having significant advantages when producing products under the low strength threshold.

The high strength duty increase, which Government documents state is being used to pay for the low strength discount, is creating additional costs for microbrewers who choose to make beers over 7.5%. This is likely to inhibit further product development in this area. Beers in these strengths are looking likely to provide an export growth market. however, if it is uneconomic to develop for a domestic market first then this is likely to inhibit the development of this important part of the British brewing industry.Exporting is one of the potential areas to generate economic growth.

I understand that CAMRA are now asking for an increase in the low strength threshold to 3.5% and so allow big brewers to retake this bread and butter market. My sources are confident that any widening of the low strength beer duty band will be paid for with significant changes in HSBD too. I ask that CAMRA rethink this policy for the sake of the many microbrewing businesses. If this proposal goes ahead there is likely to be a decrease in the number of breweries that will remain viable.

Dave Bailey



Thanks again for your e-mail.

The key point is that CAMRA is totally committed to the retention of small brewers relief and are keen to see the scheme extended further to assist small brewers to grow.

Additionally, we would like to find a way of ensuring small brewers can benefit from the reduction in duty on low strength beers and would be very keen to work with SIBA on this.

CAMRA opposed the levy on beers above 7.5% along with SIBA and the BBPA.

Increasing the EU cap on reduced duty for low strength beers from 2.8% to 3.5% would require a change to an EU Directive to make it possible. That is quite a challenge and wouldn’t happen overnight. CAMRA would also like to see this Directive amended so that small brewers can benefit from this concession, which I think would deal with some of your concerns.




chriso said...

I see your point Dave. The way things have been implemented are not to my benefit as a consumer (and long time CAMRA member). Frankly, few of the sub 2.8% beers are of much interest to me and, should the reduced duty cap be increased to 3.5%, I doubt that many of those would be either. Fact is, my drinking preferences are not for low strength supping beers sold as cheaply as possible. I'm more inclined towards interesting beers, made by brewers who can make a decent living from producing those beers and, if that involves me paying the price, I'm happy to do so. Inevitably, plenty of the beers I'm interested in will be in the 7.5%+ band and, if those start to disappear because not enough people are prepared to pay the price, my choice as a consumer is eroded.

I can't quite recall the details of CAMRA's policy on reduced duty for low strength beers, but the approach explained by Mike Benner is not the way I would have gone about things. It is quite clear that the provisions current in force are detrimental to small brewers. It seems odd to me to support an initiative that is detrimental to small brewers in the hope that it can be extended to include them at some later date. I would, at the very least, have opposed the low strength reduced duty unless it included small brewers from the outset. But, as you suggest, if the reduced duty income had to be balanced by hikes at higher abv levels, it probably wouldn't have benefited the small brewers that I like to support anyway.

Neville Grundy said...

I think both enquiry and reply were phrased in reasonable terms, and I hope Mike's reply will make some people feel slightly happier about CAMRA's position, although the CAMRA-bashers will of course never be satisfied.

My view (and it's only speculation) is that the higher duty on stronger beers would have been brought in anyway, and pinching CAMRA's policy of lower duty for dishwater simply gave the government a fig leaf of justification.