Small breweries will either be pushed to the brink of collapse or hampered in their ability to create jobs because of new tax relief changes, it is claimed.
The UK government has been urged to rethink its planned alterations to Small Brewers Duty Relief (SBR) as local enterprises try to navigate their way through the current economic crisis.
The shake-up comes after the review of SBR led to plans to reduce the threshold at which firms are entitled to full tax relief.
Industries are concerned small breweries in Scotland will face increased financial costs which will most likely disincentive the smallest companies from growing.
One of those, Cowdenbeat-based Beath Brewing, will not be immediately impacted by the change but the business’ Ian McGrath admits there is concern.
“It does mean we have to think very carefully about our longer-term growth.
“Our next expansion might mean we only go up to the SBR threshold, rather than bigger. This ultimately means we won’t create as many jobs in the local area.
“It feels like this is all to benefit the big brewers. Just look at some of the other suggestions, like brewers keeping the SBR for three years after being bought out.
“It would make small businesses attractive targets for multinationals.”
Kirkcaldy and Cowdenbeath SNP MP Neale Hanvey accused the UK government of “pulling the rug from under small brewers at the worst possible time”.
“Support should be strengthened to see these small companies through tough times and protect local jobs, but instead ministers decide to tinker with the Small Brewers Duty Relief.
“That relief is precisely the reason why we’ve seen a boom in small brewers across the country. Just look here in Fife, where there are now at least 11 breweries across the Kingdom, including Beath Breweries in my constituency.
“That is now at risk because of the UK Government’s proposed changes.
“Microbrewers like Beath Brewers won’t go out of business, but they’ll choose not to take that next step and grow.
“Either that or they could fall victim to the predation of large, multinational breweries.
“And the duty relief in its current form has been vital in helping small craft brewers compete in the marketplace dominated by large and global brewers.
“The UK government must look at alternative approaches to secure the future of the industry at this difficult time.”
The Treasury said it invests over £65 million per year in craft brewing through small brewers relief, adding: “We’ve consulted with hundreds of breweries who have told us that the relief was being withdrawn too quickly, and therefore preventing their businesses from growing.
“To support these small breweries, our proposals will mean that they’ll still benefit from the relief as they gradually expand their businesses, rather than having an all or nothing approach where it’s rapidly withdrawn above a certain level.”
