A CUMBRIAN brewery may have to call a halt to its expansion plans after a change by the government in the way beer producers will be taxed.

Artisan brewery Fell, based in Flookburgh with outlets in Kendal, Penrith and Greater Manchester, has hit out over the changes in late July which they and many others feel will benefit larger producers at the expense of small independents.

Currently breweries which produce less than 5000hl of beer per year - 17,000 pints per week - only pay half of standard beer duty, known as Small Brewers Beer Duty Relief or SBR. The new reduced threshold will mean that, in future, only breweries which produce less than 2100hl - 7,000 pints per week - will benefit from the relief.

Andrew Carter, managing director and co-founder, said: “Small breweries are being penalised for the benefit of larger breweries. This policy is revenue neutral, it doesn’t benefit the tax payer, it merely benefits larger breweries at the expense of smaller ones.”

The changes, part of a wider shake-up of business rates, has left hundreds of small breweries across the country facing a significant tax increase at a tremendously difficult time due to the Covid-19 pandemic and ensuing lockdown which has caused irreparable damage to the hospitality and retail sectors which Fell relies on.

Fell brewery is in line to be impacted as it currently produces around 2500hl a year- 8,000 pints per week.

Since launching in 2013, Fell has become a real success story for Cumbrian industry and rural enterprise, with the SBR and EU grants key to helping it get a market foothold.

Tim Bloomer, Fell co-founder and head brewer, said: “Knowing we, along with our customers, are now going to pay more tax so that much larger breweries can pay less, leaves a very sour taste. We were about to pull the trigger on a major expansion that would create new jobs and this law change now jeopardises that. The government has completely let us down.”

SBR was introduced in 2002 to create a fair system of taxation that recognises that smaller breweries can’t achieve the same economies of scale and low production costs as larger breweries. By enabling smaller breweries to compete, SBR has led to the UK’s craft brewing revolution and the creation of thousands of jobs in microbreweries.

The Covid 19 pandemic has proved enormously challenging for these small independent businesses, with the collapse of sales from closed pubs. As manufacturers, many have not been eligible for government grant support schemes either.

The UK’s alcohol duty rates are some of the highest in Europe and the Society of Independent Brewers stated this will affect 150 UK breweries.