THE general manager of an independent brewery based in Dunsden said the rise in alcohol duty rates will have a “significant impact” on the business.
Loddon Brewery, which is based in Dunsden Green and brews up to 30,000 pints a week, including draught, ale, bitter and stout, is one of a small handful of breweries in the Henley area which will be affected by the change.
At the last budget, in November, the Government announced it will uprate all alcohol duty rates to be in line with the Retail Price Index, which is at 3.66 per cent.
It also said it would increase the cash discount provided to small producers to maintain the relative value of Small Producer Relief, which provides lower alcohol duty rates for smaller producers, like Loddon.
The producer’s products must be below 8.5 per cent alcohol by volume, not produced under licence, and the premises must produce below 4,500 hectolitres of alcohol per year.
These changes will come into effect from February 1.
Shane Willoughby, 38, who lives in Benson, said that Loddon is expected to pay £19.45 per litre of alcohol for most of its products.
He said the announcement was “disappointing” but “wasn’t entirely surprising”.
“It almost felt like a non-reaction”, Mr Willoughby said. “Many of us in hospitality have become somewhat numb to bad news.
“Since covid, independent businesses in this sector have faced a constant stream of challenges, so while it was disappointing, it wasn’t entirely surprising. The rise in duty is simply another hurdle we now must work through.” Mr Willoughby said the increase is another addition to rising costs across the board, which already impacts its production.
He said: “It will have a significant impact on our running costs when added to existing increases across energy, wages and the raw materials that we use and that’s just to name a few.
“The rise in alcohol duty becomes another major pressure point.
“We’re a community-driven business and our pricing reflects our costs rather than large profit margins. That said, we are still a business, and we work extremely hard to remain viable.
“Passing these costs directly on to customers isn’t straightforward, as we understand that people are also facing rising living costs.
“We’ve always tried to price fairly and consistently, and that won’t change but there will be some effect. We will have to absorb some of the increased costs and any necessary price increases may lead to reduced sales as people have less disposable income.”
Mr Willoughby believes the UK risks losing independent pubs, which are being placed under additional pressure by the changes.
“Starting and sustaining a small business is becoming increasingly difficult,” he said. “Breweries and pubs of our size already face significant challenges and there is a real risk that the UK could lose much of what makes its hospitality scene special, which is independent pubs that act as community hubs where people meet, talk and create memories.
“Hospitality was once a haven for many and the worrying thing is that it’s increasingly becoming a luxury. If we’re not careful, we will become dominated by large franchises at the expense of local, independent venues.”
A HM Treasury spokesperson said: “Our changes to alcohol duty balance the important contribution of producers, pubs and hospitality with funding vital public services and the harms caused by alcohol.
“We have also stepped in to cap business rates bills at 15 per cent or lower and help pubs and other businesses with a £4.3 billion support package.”
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