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Pint of beer
Has progressive beer duty contributed to an increase in microbreweries and cask ales?

The influence of Progressive Beer Duty in the UK

Forget fancy cocktails or a glass of prosecco, the most popular choice of drink in Britain is beer.

And it’s no wonder, with more than 5,000 high quality beers to choose from.

If you went into a pub and witnessed what people ordered, for every ten drinks, seven are likely to be beer, while the other three are usually wine, cider or spirits.

But it’s not just a drink to enjoy in the pub with your friends, it’s a major contributor towards the economy.

There are now over 1,700 breweries in the UK who export 923 million pints to 110 countries. Beer and pubs contribute £22bn to UK GDP and generate £13bn in tax revenue.

The production and sale of beer also creates several jobs in agriculture, brewing, pubs, retail and the wider supply chain. In total the beer and pub sector supports almost 900,000 jobs right across the country, with 46% of those employed in the pub sector aged 16 to 24.

These facts highlight the positive impact of beer, yet it is still taxed heavily by the UK government.

In 2008 a beer duty escalator was introduced which put up the price of a pint by 2% above inflation every year, resulting in a 42% tax hike by 2013.

The escalator was eventually scrapped at the 2013 budget, and beer duty was cut by 1p, which was welcomed by Britain’s beer drinkers and renewed business confidence.

Beer tax has now been cut in the 2013, 2014 and 2015 budgets, but it is still significantly higher than its EU counterparts.

However small and independent breweries have been benefiting from a tax relief for over a decade.

What is Progressive Beer Duty?

The Society of Independent Brewers (SIBA) represents independent breweries in Britain and campaigned tirelessly for Progressive Beer Duty, which was introduced in 2002.

This beer duty system allows smaller breweries to pay less tax on their products and has influenced the growth of small microbrewers which has generated more interest in cask ale.

It was adopted by the European Union (EU) as a derogated power so not all countries implemented the idea.

EU law allows a maximum discount of 50% off normal duty rates on production levels up to 200,000 hectolitres (hl) per year.  

Each country can choose the percentage and level of production, so while Germany chose to adopt the full 200,000hl, the UK opted to provide 50% relief to those brewing up to 5,000hl (over 880,000 pints) and a lower discount for up to 60,000hl (over 10m pints).

This is a huge benefit to microbreweries as the tax relief can enable them to afford to employ more people and invest in equipment to produce quality cask ales.

This of course has not been well received by regional brewers who don’t qualify for the discount.

Breweries producing more than 5,000hl are losing out on a significant tax relief, yet if their production was done in microbreweries they might have qualified for either full or part duty relief.

For example, if two breweries produce 5,000hl they both receive the full duty relief. However if one brewer produces 10,000hl they will receive lower amount of duty relief.

Those who receive relief may also be influenced to sell their ale at a cheaper price compared to large business competitors, but this is not the intention of Progressive Beer Duty.

According to the lost pubs project there are four pubs closing every day, yet if the lower threshold for tax relief was increased to the maximum permitted by EU law, this could allow more established companies to invest and expand, rather than face the possibility of closure.

Carbon dioxide in micro-breweries and how Analox can help

With the rapid rise of micro-breweries, an increased amount of carbon dioxide (CO2) is being used in smaller environments for purging process tanks and carbonating alcohol. It is also a natural by-product of the fermentation process, when yeast reacts with the sugar in the beer.

CO2 is an odourless, colourless gas that is heavier than air, and therefore may gather unnoticed in cellars and vats. Fumes from CO2 can quickly overcome brewery workers and lead to asphyxiation or even death.

The best way to monitor increased levels of CO2 is with a gas monitoring system.

Analox offer both fixed and portable gas analysers for monitoring CO2. The Ax60 was developed in response to gas leak incidents in the beverage and hospitality industry and continually monitors for CO2, with visual and audible alarms if gas levels climb above acceptable limits. It consists of a wall-mounted central display, sensor units and alarm units.

A smaller version of the unit known as the Ax60k is ideal for craft and microbreweries as it is cost effective, has a long life and requires minimal maintenance. There is no central display compared to the Ax60, and it has one sensor and one alarm, but additional alarms can be added as needed.

The Aspida is a robust portable alarm, meaning that staff are protected wherever they are in the brewery. The Aspida can also be wall-mounted as a back-up to a primary gas detection system. Similar to the Ax60, the Aspida has visual and audible alarms, as well as a ‘man down’ button for emergency situations.

To find out more about the products Analox offer for breweries visit our beverage and hospitality section.

Author: Araminta Hartley, Content Writer

Founded in 1981, Analox Sensor Technology provides niche and custom gas detection solutions to industries including beverage and fast food, commercial diving and laboratories. Analox has over 325 years of collective, specialist electronics and software engineering expertise, as well as a worldwide distributor network. 

Contact us to see how we can provide expert gas monitoring solutions and help you achieve your goals.

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