Small Breweries Relief

Ben Lake Excerpts

Monday 9th November 2020 Commons Chamber

[Kemi Badenoch]

My right hon. Friend asks a really good question. The truth is that there is never a good time according to the industry; there is never a perfect time. When people have a dispute, it depends on which side of the argument one listens to. This will be addressed in the technical consultation. We must remember that this measure is not coming in until 2022, so there will be time. We will publish more information about the evidence that we have received as part of our upcoming consultation, which will be towards the end of the year.

[Ben Lake]

I appreciate the Minister’s point that there is never a good time to try to get consensus from the industry, but surely we can agree that the past nine months has seen quite exceptional circumstances that have had an impact on the entire industry, whether that is small breweries or the bigger ones, particularly given the uncertainty with the on-trade. Breweries such as Mantle Brewery and Penlon Brewery in my constituency of Ceredigion are also so dependent on tourism. Surely introducing these changes at a time of such uncertainty is unwise and should be reconsidered.

[Kemi Badenoch]

That point would be valid if it were proved that every single business was going to be negatively affected. If hon. Members let me get to the point, they will see that that is not actually the case. My officials could probably give me enough material to talk about this issue alone for an hour. However, I will summarise and make the key points. All the evidence points to the fact that small breweries relief does not match industry production costs. Economies of scale in brewing are rather gradual and do not match the all-or-nothing approach adopted by the current scheme. In fact, some of the evidence suggests that there is a growth trap, whereby brewers in a certain range enjoy lower production costs than brewers many times their size as a result of small breweries relief. This is not healthy for any industry.

The amount spent on the scheme has grown rapidly, from £15 million in 2002 to over £65 million in 2019, despite the fact that beer volumes were down over 30% during this period. We owe it to taxpayers to make sure that these growing sums are being used in the most effective way.