It is Time for More British Craft Beer

It is Time for More British Craft
It is Time for More British Brewers
and More British Brewery
The most important factors that led
to the growth of small, craft brewers
in the US
• The significant change that has come from the
• While not perfect, a lower rate of excise tax for
small brewers
• The set of laws that limit the ability of a brewer
to provide significant financial incentives to
Pay attention to our jobs and help us
to create more jobs
• In the US, small brewers (everyone under
5.1m hl) employ 1 WTE for every 1000 hl we
produce. ABInbev and MillerCoors employ 1
WTE for every 50,000 hl they produce.
• Small brewers are 5% of the US beer market,
a little over 10m hl. We are 50% of the jobs.
What do policy makers need to do to
maximize the number of jobs in the
• Implement policies that encourage the maximum
number of players. Look at barriers to entry and ongoing operating taxes and regulations.
• Convert lots of small brewers into medium size
brewers. We know that a brewery that produces
10,000 hl will employ at least 10 people and probably
more. We know that a 100,000 hl brewer will employ
at least 100 people. The same ratio. The ratio only
changes at very large sizes, say 4m-6m hl and above.
The sweet spot
Meaningful, graduated excise taxes (US) / duty
US Federal excise tax structure
• Small brewers are defined as those producing
less than 1,704,400 hl. Those brewers pay
£3.65 per hl on the first 51,132 hl. Above
that level the brewer pays £9.30 per hl. If a
brewer exceeds the 1,704,400 hl they pay
£9.30 per hl on all
• Including the average State excise tax,
effective total duty is £8.88 per hl on the first
51,132 hl and £14.53 per hl above that level
UK Duty
• The comparable UK duty rate is £82.35 per hl
(5% abv). The rate for the first 5,000 hl at
50% is £41.18 per hl
• Note, all beers pay the same duty level
irrespective of alcohol content. Assuming that
the average abv is 5% abv (and it may be
slightly higher for American craft beers)
1700 small US brewers
Up to 19,999 hl
20,000 to 51,132 hl
51,133 to 99,999 hl
100,000 to 499,999 hl
500,000 to 1.99m hl
Above 2m hl
• Many brewers have built capacity up to the
51,132 limit
500 SIBA brewers
Up to 999 hl
1,000 to 4,999 hl
5,000 to 29,999 hl
30,000 to 200,000 hl
• Nearly 85% of UK small brewers are below the
5,000 hl threshold.
SIBA Brewers Employ 3,200 British
Consumers (and voters) in 2010
• UK small brewers produce 1.7m hl of beer.
that is 1 FTE for every 537 hl of beer. What is
the rate for MolsonCoors, for Carlsberg, for
Heineken? It is likely to be 1 FTE for every
50,000 hl of beer.
British beer drinkers want to drink
more beer from small and
medium size British brewers that
employ tens of thousands of
British workers

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