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Trouble brewing in the beer industry?
Since the impact of PBD has become clear, medium-sized breweries have been complaining about its unfairness. What's the reason for their concern?
The medium-sized breweries are upset that newcomers to the industry are, in effect, being subsidised to produce beer. They feel that if they were to receive a similar cut in duty, the medium-sized brewers could become even more competitive with the major players in the industry.
What's worse, say the medium-sized breweries, is that the small breweries lack ambition to grow their business as a result of PBD. There is little incentive, say the regional operators, in the small breweries increasing their output above the upper limit for PBD. So microbreweries are accused of failing to be efficient - they merely take the taxpayers' money and run.
Indeed, say the medium sized breweries, the smaller operators are also taking market share from them. The market for real ales is not growing as fast as it seems, they argue; it is being substituted from the medium-sized to the small breweries. In summary, they argue that they are less able to compete with the majors.
Recent months have seen lobbying of the Chancellor and his Government department, the Treasury, by the regional breweries. They have been urging a far higher limit on PBD. Only this, they say, will give a fair incentive to all small and medium-sized breweries. It will also stimulate investment in new brewing capacity, which will benefit the entire industry and consumers alike.