The Government has rejected a deferral of beer duty payments due on 25th April relating to beer produced in March.
Beer duty for the whole of the next quarter, amounting to £750 million, April-June, will also not be deferred.
Brewery sales to pubs currently is about zero, and this is due to pubs following Government Covid-19 guidelines.
The relationship between pubs and brewers is symbiotic, 7 in 10 alcoholic drinks sold in pubs are beer, so without one the other suffers. With pubs now closed, 70% of the UK beer market by value has been cut-off to Britain’s 2,000 breweries.
The British Beer & Pub Association, and other trade bodies, called on the Government to defer April’s duty payment and those of the following quarter. The call was made to provide vital cashflow support to the UK’s 2,000 brewers who supply UK pubs.
Chief Executive of the British Beer & Pub Association, Emma McClarkin said of the decision:
“The Government’s failure to defer beer duty is 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.
“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.”
The question needs to be asked now is: Should Rishi Sunak go to Switzerland for a lesson in financial crisis management?
We reported earlier in the week that research done by The British Beer & Pub Association has also show pubs and breweries facing limited support from local authorities.
It seems that the Government’s assurances that they will do ‘whatever it takes’ is not even a statement of intent. And it is certainly not something they are living up to.