SIBA: "Disappointing" Budget announcement may lead to more brewery closures
The details of the Budget as revealed today by Chancellor Rishi Sunak are a “disappointment” to the nation’s struggling small breweries and their supply chain, according to the Society of Independent Brewers (SIBA).
James Calder, SIBA’s chief executive said: "Today, the Chancellor spent an extraordinary amount of taxpayers money to help keep the economy moving and jobs protected, pledging almost £59 billion to policies including furlough extensions, continued business rates cuts, grants for hospitality of up to £9,000 and a series of investment initiatives.
“Whilst this is helpful to the broad hospitality sector, it does nothing for the nation's struggling independent breweries, who desperately needed direct tax cuts and targeted grant support to help them survive until the economy re-opens. What is the point in helping hospitality if there aren’t vibrant, diverse and local beers on offer when the economy re-opens?
“As a result of today’s announcements more breweries are now more than likely than ever to close, just as there is light at the end of the tunnel.”
Calder noted that breweries and wet-led pubs will not benefit from the VAT cut extension as it does not apply to alcohol.
He said: “Breweries will still be paying full business rates, VAT and duty and will not receive specific grant support - and whilst freezing beer duty is welcome, the Chancellor is still intending to increase the tax bill for at least 150 small breweries from next January with ruinous changes to small breweries’ relief, putting jobs and the recovery at risk.
“The recovery loan scheme which takes forward CBILS and Bounceback loans will benefit breweries and many will take advantage, but will continue to saddle them with debt, rather than direct grant support, inhibiting growth and investment in the sector for years to come.
“Restart grants of up to £18,000 per hospitality business will help businesses plan, but once again, it doesn’t look like breweries are automatically included within the definition, therefore are at the mercy of discretionary grants. Different local authorities may grant one business support, one not. One may do this in weeks, others in months.
“The ‘Super Deduction’ policy announcement, giving companies investing in qualifying new plant and machinery assets a 130% super-deduction capital allowance on their tax bills may be beneficial, but detail as to which taxes can be offset against is not yet published.
“Whilst this Budget will likely be celebrated by the broader hospitality sector, it comes as a disappointment to the Nation's struggling small breweries and their supply chain, who have once again been de-prioritised by the Chancellor."