Beer: the bitter taste of bad legislation

With the British economy stubbornly refusing to splutter into life, now is not the time to be stifling innovation – but that’s  what the coalition government have done with this week’s introduction of High Strength Beer Duty (HSBD). This is a new tax on all beers above 7.5 per cent in strength, with the intention of tackling problem drinking by encouraging manufacturers to make lower-strength beer. It may well achieve that aim, but it will do plenty of damage at the same time.

That’s certainly the view of Justin Hawke (right), the brewer at Somerset’s multi-award winning Moor Beer. Hawke produces a IPA called JJJ, which has a ABV of 9 per cent. It’s a delicious, complex product but, Hawke says, one that from now on will be increasingly difficult to find in the UK. He expects to send at least 90 per cent of a recently brewed batch overseas (mostly to Europe). Normally he would keep more than 50 per cent for sale in this country. In addition, he isn’t planning to brew any more for the foreseeable future.

“We’ve just been deciding what we’re going to be brewing over the next six months and we’ve taken JJJ IPA off the list,” he says. “That’s in part due to the tax. We’ll review it but at the moment we’ve taken it out of the brewing schedule and the last batch that we’ve just bottled, I’d say at least 90 per cent of it will be exported straight away. It’s not worth selling it in the UK.

“[This new tax] is going to result in a change in the way we view the market and the way we brew. Effectively we have to look at the beers we are putting out – most of them [the stronger beers] will have to go for export where there is no duty paid.”

Hawke is clearly angry that a measure designed to curb ‘binge-drinking’ (a phenomenom that appears to be on the decline, anyway) will have such a destructive impact on Britain’s burgeoning brewing scene. He points out that those intent on getting drunk and causing trouble are unlikely to use his products (a 660ml bottle of JJJ costs a little more than four 500ml cans of Special Brew) to do it.

“We have huge demand for our beers,” he says. “They’re priced at a premium pricing point so they’re certainly not being drunk by winos, [who are more likely to be] drinking alcopops and cheap cider. Its not used for pre-fuelling, its meant to be shared and at that price point it encourages people to drink responsibly.”

The new tax (which, according to the government’s own figures, will mean a 25p increase in price on a 500ml can of beer at 9 per cent abv) is bad news for importers as well. James Clay, who are based in Yorkshire, import all manner of high-quality beers into Britain. HSBD, they say, will affect more than a quarter of their products. Nigel Stephenson (right), a speciality beer consultant at James Clay, believes that the legislation fails to acknowledge the complexity in the market.

“Many beers of 7.5% and over are hugely revered in their own countries and by connoisseurs worldwide,” he says. “The policy sends a clear message to the UK alcohol industry that the government is alarmingly out of touch with the market and to the real cause of problem drinking: cheaply priced alcohol – beer, wines and spirits – in supermarkets.

“It’s a shame that while trying to tackle problem drinking, ministers risk impeding a growing momentum for quality beers enjoyed by responsible drinkers.”

Like many, Stephenson is perplexed that beer and not wine has come under attack. ““The policy has unfairly singled out beers over 7.5% as the root cause of problem drinking,” he says. “These beers actually account for less than 0.5% of UK alcohol sales, whereas 99%+ of wine sales are over 7.5% abv. So why is the Government pointing the finger at world classic beers such as Duvel [8.5% ], Brooklyn Black Chocolate Stout [10% ] and Schneider Aventinus [8.2% ] – each of them the Mouton Rothschild of their styles – and not wine?

“The folly lies in the fact that these beers are more akin to a fine wine in the way they are reverently crafted and consumed.”

Hawke agrees. He is frustrated that the neo-prohibitionist mood afoot in Westminster has singled out beer. “It seems the government want to tax and penalise beer every time they talk about binge drinking or problems with drink-related health,” he says. “But you’ll never see cask ale or craft beer drinkers going out and [misbehaving].”

Defenders of the new legislation will point out that beer duty has been reduced for beers under 2.8 per cent ABV, but Hawke says this is effectively a pointless tax break. “We can’t sell it,” he says. “There’s no market for a 2 point something beer.

“Landlords look critically at anything with a 3 at the front – 3.8 is our lowest strength beer. At least locally. Effectively the tax break that they’re offering isn’t something that we feel, as a business, we can take advantage of and the extra tax burden stifles innovation and will cause us either to stop production or export all production.”

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