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Sunday, 26 December, 1999, 01:54 GMT
Brewers battle beer 'stealth tax'

Brewers Shepherd Neame say the tax is "unjust"

The UK's independent and family brewers have pledged to fight a new "stealth tax" on traditional cask beer which could lead to price rises at the bar.

Customs and Excise told brewers before Christmas they were planning to levy tax on over-filled casks. Although they had planned to charge the tax from New Year's Day onwards, they agreed to a delay of a few weeks.

Stuart Neame, vice-chairman of independent brewers Shepherd Neame, said: "The change was originally planned to take effect from New Year's Day - ironic, considering the Chancellor froze beer duty in his last Budget so as not to spoil the millennium party.

"Although C&E have now agreed to postpone the increase by a few weeks, they insist it will still go ahead. But it's unjust, and we'll be fighting it all the way."

Brewers will now have to avoid over-filling casks
The company lost a court case against the government in February, after arguing against the decision to raise beer duties again. Shepherd Neame said this was a breach of European Union rules on tax harmonisation.

The three Court of Appeal judges said they were "sympathetic", but added there was "no legal obligation on the UK to abstain" from raising the tax on beer.

It is estimated the new tax will raise between 10m and 15m a year. But industry sources say that this could cripple smaller brewers unless they raise the cost of beer.

Anthony Fuller, chairman of the Independent Family Brewers of Britain, said: "This is a disgraceful example of the Treasury raising duties without reference to Parliament.

"It is a stealth tax which will hit hardest those taxpayers the government should be protecting - the smaller brewer, the community pub and the drinkers of traditional draught beer."

'Nail in the coffin'

Until now, brewers had been obliged to show "due diligence" in filling casks, and have traditionally allowed a slight overfill to satisfy weights and measures legislation. It is this overfill which will now be taxed.

Carola Brown, Chairman of the Society of Independent Brewers, says that micro-breweries - small companies producing cask ales for very local markets - will be particularly badly hit.

"They simply cannot afford sophisticated meters and control systems to reduce over-filling of casks," she said.

"Most people would applaud them for trying to make sure that their customers get full value. Now customs will effectively fine those who do so."

Mike Benner, spokesman for the Campaign for Real Ale, described the move as "another nail in the coffin" for community and village pubs "where most cask ale is drunk and where price sensitivity is a key issue".

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See also:
15 Feb 99 |  The Economy
Beer battle lost
25 Jan 99 |  The Economy
Bitter battle escalates

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