Monday, 18 August 2014

Beer after Independence

A comment was made in passing on my facebook profile suggesting that Independence could have a vastly negative impact on the Future of the Scottish Beer market. So it got me thinking, and raised many questions that I'm hoping more enlightened people than me might have an answer/opinion on.

How do cross border sales work. As i understand it Alcohol Duty is payable in the destination country. So this leads to several sub questions.

  1. Would Independence make all cross border sales more likely to have to go through  a wholesaler (as paperwork for direct selling to a pub too much hassle) Leading to less choice in Scottish pubs?
  2. Would it be easier for Brewers (especially the better ones) to sell mostly to England  thus avoiding having to pay duty up front.
  3. Would Wholesales want to deal with the extra hassle of Cross-border shipments.

 This Document was referenced (from 2011) which suggested that the current Scottish Government would like to raise Beer duty in line with Whisky. This would create imbalance between Scotland and England Duty rates. If i have calculated correctly raising duty to Spirit levels, would see Duty on a 4.1% pint from 43p to 58p  (or a bit over £10 per cask) , given the questions above,
  1. Would an increase in Scottish Duty make Scottish Brewers more likely to sell to England. 
  2. Would any increase in Duty lead to Brewery Closures.

Now it may be that I've totally misunderstood how the market works, so welcome all comments on the issue, or even further question.

Id especially be interested in Brewers who  think Independence will make life harder or easier.

Personally, if i have understood it right we could well see the loss of direct to pubs sales, but dont think we will see more Scottish Brewers selling exclusively or even mostly to England unless the Tax rate (which given the date of article i dont put much credence in)  becomes vastly different.