Small Breweries Relief

Motion made, and Question proposed, That this House do now adjourn.—(David T. C. Davies.)

Diolch yn fawr iawn, Ddirprwy Lefarydd.

I, like the vast majority of Members of this House, am proud to speak up for the excellent independent breweries of my constituency. These include inspiring beers from Cwrw Llŷn of Nefyn, Cader Ales in Dolgellau, and Porthmadog’s Mŵs Piws—which I imagine does not need translating as Purple Moose—as well as Myrddins Brewery and Distillery of Barmouth. Other bragdai bach of the county of Gwynedd include Bragdy Lleu in Penygroes, Snowdonia Brewery of Waunfawr, and Cwrw Ogwen in Bethesda.

This debate is not intended to be a language lesson, but I think Members will know the meaning of the words “cwrw” and “bragdy” when we have finished. The word “bragdy” is very similar to “brewery” because it is the same thing. “Cwrw” is an old Celtic word—Welsh word—meaning beer, but Members may recognise it from other places with words such as “cerveza”. There is a real pedigree to these words. I will not indulge myself any further, because given half a chance I should.

All in all, Wales is home to about 90 independent breweries. However, these small breweries have to hold their own against the global beer companies that dominate the pub handpulls, the bar taps and the supermarket shelves. The small breweries relief scheme was launched in 2002 to allow them to compete and to compensate for lack of market access. It gave independent breweries a fighting chance to get their beers out to a public thirsty to taste something new and different.

I am very pleased to see how many people have arrived in the Chamber: there is a common denominator that brings us together. I congratulate the right hon. Lady on bringing this debate forward; she does so well in doing so. With one in eight staff in the pubs and breweries industry already having been made redundant so far, does she agree that any relief scheme must include an extension of business rates holidays, with consequentials for the Northern Ireland Assembly and the other devolved Administrations to do the same, as with other areas? This must be extended to suppliers and to their business premises. These companies can continue to produce but have no market to sell to. Something really needs to be done, and we look to the Minister to give us the response that we are after.

It is of course an honour to be intervened upon by the hon. Gentleman. I really appreciate his intervention, and I will touch on that matter further. In the time in which we find ourselves, our breweries have been affected as much as the pubs that have been closed, and the pubs have received considerably more support than the breweries in the difficult recent months.

I am grateful to my right hon. Friend for securing this debate and bringing this issue to the House. She mentioned the tax relief that helped small brewers to compete against the large companies. Does she suspect that these large companies have been bending the ears of the Treasury?

I am sure that the small handful of global beer companies have a very effective lobbying system. It is of course our job to lobby here as well on behalf of our constituencies and small breweries.

I commend the right hon. Lady for calling this debate. I am just reflecting on what she is about to talk about, which is the uncertain business environment that our small breweries face and the fact that the consultation that led to the Government recommending this change in rate relief was carried out at a very different time. Does she agree that perhaps this is time to pause so that breweries such as Andwell Brewery in my constituency can get the certainty that they need as we move forward?

I entirely agree with the right hon. Member. At this time, even if the changes were to be introduced in January 2022, we are, none the less, presenting the breweries with uncertainty that they desperately do not need. The timing of this is really significant and now is not the time to be mentioning these changes, let alone to be moving ahead with them.

I wish to move on, although I truly welcome all the contributions from the many Members here, because I am sure that we are all doing the best for the brewers in our constituencies.

Before the right hon. Lady moves on, I wanted to mention Niall Kennedy of the excellent Wee Beer Shop in Pollokshaws Road in my constituency. As a small independent business, it sells lots of the beers that come from these breweries. Does she agree that the Government should look at this more widely, because those small shops have also struggled through coronavirus, and they rely on the beers that come from these companies, too?

The fortune of these shops—I have a similar one, Stori, in Bala in my constituency—is dependent on the success and the flourishing of the small breweries.

I will, if I am allowed, go back in time to 2002. My understanding is that the Government of the day decided to introduce reduced rates of duty for three reasons, and I think we should pay attention to these. The first was the poor profitability of small breweries relative to that of larger breweries, which enjoyed better economies of scale of production.

Charnwood Brewery in Loughborough is successful as a local brewery, with a local supply chain and a local distribution area. These small independent breweries serve their customers well. They do not want to merge and they do not want to grow. They are happy as they are. Does the right hon. Lady agree that small breweries relief enables businesses to remain viable and to remain small?

It does indeed. One thing that characterises our small independent brewers is their stake in their local community and that is something that is precious to all of us.

Let me move ahead. The second of the three issues from 2002 that the small breweries relief was to address was the difficulties faced by small breweries in bringing their goods to market and in competing with larger breweries, which would offer bigger discounts to wholesalers, and I believe that that very much still holds true. The third point was the importance of maintaining diversity within the beer industry and preserving choice for the consumer. We should respect these underpinning principles today as well.

May I congratulate the right hon. Lady on securing this important debate? After hearing from many of my constituents in Broxtowe in this trade, not least Ginny and Rob Witt who own the microbrewery Totally Brewed, I, too, am concerned that small breweries are falling through the cracks with little support, despite their vital role in the hospitality business. Does she share my concern that we need to support and offer clear guidance to be laid out for small breweries and hospitality supply chain businesses?

I entirely agree with the hon. Gentleman. Of course we can all agree that there is support for the hospitality industry, but the small breweries industry is an integral part of that. If we see that collapsing, it somehow suggests that there is a discrepancy there.

Let me move ahead now. Despite the boom in craft brewing over the past decade, it remains the fact that nearly 90% of beer consumed in this country is still produced by a handful of global companies, and, despite their numbers, small breweries still only represent about 7% of all the beer sold in the United Kingdom.

The small breweries relief scheme allows independent brewers to pay a proportionate amount of duty to the Treasury, just like income tax. Its success is self-evident with at least one brewery in every constituency. The numbers who are here tonight give credit to that.

I would like to add my name to the long list of others who have thanked the right hon. Lady for securing this very important debate. I am proud to represent Titanic Brewery in the constituency of Stoke-on-Trent North, Kidsgrove and Talke, which benefited in 2002 from the small breweries rate relief. Those from the brewery said to me in advance of this debate that they are really shocked. Even though now, with the amount they are able to brew, they would not benefit from the scheme, they find it “perverse”—that is the word they have used—that we would see such market interference and reduced competition in the marketplace. Does she therefore agree that this, as she has already stated, is completely the wrong thing to do at the present time?

I agree entirely, and the hon. Gentleman is reading my mind, because that is exactly the subject I would like to move on to now. As I have said, many of us have at least one brewery—many of us, far more than that—in our constituency.

The right hon. Member is most generous in giving way, and I thank her so much for bringing such an important debate here this evening. I recently visited the fantastic small brewer of Moon Gazer ales in a small village called Hindringham in my constituency. The right hon. Lady is coming on to the small breweries relief in a minute, but this brewery is now eight years old. It was set up by a husband and wife team—David and Rachel Holliday—and it is just one of 150 that would be disproportionately affected by the Government’s cutting of the small breweries relief. That impact alone would cost them a potential extra £100,000, with no ability to expand because of the rural market they are in. Does she agree with me that the Government must be sensible and look carefully at the 150 brewers that will be significantly caught by these changes?