Beer Duty

Will Forster Excerpts

Tuesday 15th July 2025 Westminster Hall

[Mr Will Forster (Woking) (LD)]

I beg to move,

That this House has considered beer duty.

It is a pleasure to serve under your chairmanship, Dr Murrison. We are here this afternoon to discuss beer. I love beer, and so does Great Britain. I secured this debate to acknowledge calls from constituents, brewers and the pub sector to call on the Government to reduce beer duty by 50p. That call makes economic sense and is backed up by the industry.

My Woking constituency is home to a great little brewery called Thurstons in Horsell and Asahi’s UK headquarters—a huge brand that covers Fuller’s, Peroni and Cornish Orchards, to name just a few. The beer and pub sector in Woking supports over 1,800 jobs and contributes £100 million to our local economy, yet customers and the industry across the whole country are struggling. Pubs are much more than just businesses; they are hubs in our high streets and the centres of community life.

Why 50p? The answer lies with the new extended producer responsibility scheme. In May, MPs were talking at great length in this Chamber about how brewers currently make around 5% on the average bottle of beer. Under EPR, brewers will lose around 3p a bottle, unless they raise prices or the Government step in. The economics simply do not add up. Without action, brewers will barely make a profit on bottled beer. By reducing beer duty by 50p, the Government would offset the cost of EPR for not just producers, but the entire supply chain, and, ultimately, consumers. All the people—from farmers in their fields to brewers in their brew houses, to the people drinking in pubs—are our constituents. It is our duty to reduce beer duty.

[Sarah Dyke (Glastonbury and Somerton) (LD)]

Glastonbury and Somerton is home to some lovely small breweries. Obviously, we are the natural home of cider and produce some of the world’s best. Fine Tuned Brewery in Somerton is one of our brilliant little breweries. Although I recognise the Government’s intention to make the packaging more sustainable, that cannot come at the expense of our producers. Many are concerned that the EPR will be a killer nail for their businesses, making them responsible for the end-of-life management of packaging that they do not even produce; they have to buy it. Does my hon. Friend agree that the current approach to EPR will create escalating costs for producers, threatening the viability of small rural businesses in particular, such as Fine Tuned Brewery in Somerton?

[Mr Forster]

I completely agree with my hon. Friend. We were in this Chamber talking about EPR several months back; she is a fine advocate for her whole constituency, and particularly the Somerset cider industry.

I talked about our need to reduce beer duty. The Chancellor announced a 1.7% reduction in alcohol duty on draught beer and cider in the previous Budget—I will give the Government that. However, the standard rate of duty on non-draught products is set to rise by 3.6%. When combined with the cost of EPR, that will seriously threaten the brewing and bottle industry in terms of growth and investment.

The Government are finding catchy headlines to say at the Dispatch Box, but the economic picture painted is this: the Labour Government are giving with one hand and taking with the other. This debate, at its heart, is a political response to that bad economics. The Department for Environment, Food and Rural Affairs seems determined to push ahead with EPR, despite legitimate concerns raised in the Department. Meanwhile, the campaign to reduce beer duty, which has long been led by the Campaign for Real Ale and others, enjoys wide support across the industry.

[Ian Roome (North Devon) (LD)]

Does my hon. Friend agree that a reduction in beer duty would help hard-working publicans like Simon and Alison from a micropub in Barnstaple called Beer Matters, who have just won the CAMRA award for North Devon, to continue in business? Not only is it a fantastic micropub, but it serves as a good social hub in the community.

[Mr Forster]

My hon. Friend is right to promote his amazing community hub and pub in Barnstaple. I pass on my best wishes to Beer Matters for its award.

A lot of us have concerns about the EPR rules. Under the current EPR rules, glass packaging used in pubs is wrongly classified as household waste, even though it is collected and recycled via private commercial contractors. EPR is meant to fund the cost of removing packaging from household waste streams—not from businesses that already pay for their recycling. This means that brewers and pubs face duplicate charges for the same glass, despite it never entering the household.

DEFRA has acknowledged that the policy is wrong and that it was never intended to be implemented in this way. It has committed to the industry to find a solution, but no fix has yet been delivered, and it has pressed on with the scheme regardless. Reducing beer duty would mean less tax per pint in principle, but, in practice, it would bring a great benefit.

[Wera Hobhouse (Bath) (LD)]

Pubs such as The Grapes free house in Bath provide so much more than just being somewhere to drink or meet. They host cultural events and all sorts of things that otherwise could not take place, and that would be a loss to our community and cultural life. Does my hon. Friend agree that the small loss in beer duty would be far exceeded by the benefits we get from having these places open and running?

[Mr Forster]

I agree. There is an economic argument for a small reduction in beer duty per pint, but, as she highlights, there are wider public community benefits as well. I have talked about trying to grow the economy and the fact that less tax per pint has better economic benefits. One of Labour’s key economic election promises was to grow the economy, so why are the Government ignoring calls from the industry to help deliver one of their key missions?

[Edward Morello (West Dorset) (LD)]

My hon. Friend will know—I have said this several times in this Chamber—that the overwhelming majority of businesses in West Dorset are microbusinesses, many of them in hospitality. Does he agree that EPR represents yet another attack on the hospitality sector, alongside increases in business rates and national insurance contributions?

--- Later in debate ---

[Mr Forster]

My hon. Friend is completely right. If the Government reviewed and cut beer duty, as I am requesting, the hospitality sector would see increased growth. Consumers would enjoy cheaper beer, and the industry would have more capital to invest, growing our economy when we need that most. Most critically, there would likely be an uptick in sales due to lower prices. All of that could lead to overall higher tax receipts, counteracting the flawed economics of the EPR policy.

Beyond the industry numbers, this is about people, communities and our British way of life. As my hon. Friends have highlighted, pubs are vital cultural and social centres. They bring people together, help combat loneliness and support the mental health of the nation. Many of us have personal stories that connect us to our local pubs. They are woven into the fabric of our lives, yet pubs continue to face immense pressures. The British Beer and Pub Association estimates that 378 pubs will close in 2025 alone, risking over 5,600 jobs. That is more than one pub a day.

[Mr Jonathan Brash (Hartlepool) (Lab)]

The hon. Gentleman is making a persuasive speech about reducing beer duty. One of the other great pressures facing microbreweries—such as the Crafty Monkey Brewing Co. in Hartlepool—is the inability to get their product into tied pubs. That is bad for pubs and microbrewers. Would he support a change to the pub code to allow them to get their produce into more pubs?

[Mr Forster]

It will be interesting to see what the Government make of my persuasive speech, but I thank the hon. Member for his kind words. I am sure he will not be told off for saying that from his side of the Chamber. I am happy to look into what he said about changing the pub code. One of the things I am highlighting is that we want a thriving independent sector that supports small businesses, and reviewing the code could help.

I am really concerned that, effectively, one pub has closed every day in this country this year. Nationally, hospitality employs 3.5 million people. That is 10% of all UK jobs, and the concentration is even higher in coastal areas, such as those represented by some colleagues who have spoken today. The beer and pub sector contributes £34.3 billion to the UK economy and generates £18 billion in tax. It supports around 1 million jobs from grain to glass.

The UK has the second-highest beer duty in the whole of Europe. The highest is Finland, where alcohol can be bought only in state-owned shops or licensed bars and restaurants. It is one of the two European countries that effectively has an alcohol monopoly. On a European level, Finland’s alcohol prices are considered extreme compared with other countries, but even now, the Finnish Government are aiming to reform their policies to bring them more into line with others in Europe.

Bizarrely, we are more like Finland in regard to our alcohol laws, when we should be more in line with countries such as France and Germany, which have similar drinking traditions to us. So I ask the Minister: when will the UK take the same approach? Higher beer duty has wider consequences, such as increasing prices for consumers, reducing investment, fewer choices on the shelf and making the UK less attractive for international brewers.

Even with some recent reforms, the burden remains far too high and continues to threaten the viability of local pubs and breweries. Reducing beer duty is an economic argument, yet it is also about protecting British culture, supporting local jobs, encouraging investment in communities and helping people with the cost of living. I hope that the Minister will recognise that, as some of his colleagues have, and agree to review beer duty to ensure that the level that is set grows our economy and protects jobs. Let us act before the damage to the British way of life becomes irreversible.

--- Later in debate ---

[Mr Forster]

I thank all hon. Members for contributing to the debate. I welcome the cross-party support for the change to and a review of beer duty.

I thank my hon. Friends the Members for Bath (Wera Hobhouse) and for Carshalton and Wallington (Bobby Dean), the hon. Member for Kingswinford and South Staffordshire (Mike Wood), my hon. Friend the Member for Glastonbury and Somerton (Sarah Dyke), the hon. Member for Hartlepool (Mr Brash), my hon. Friend the Member for North Devon (Ian Roome), the hon. Members for North West Norfolk (James Wild) and for Strangford (Jim Shannon), and my hon. Friends the Members for West Dorset (Edward Morello) and for Wokingham (Clive Jones) for their contributions.

Overall, the debate was relatively good-spirited and cross-party, with the occasional breakout of political disagreement. From hearing colleagues’ contributions, it is clear that communities across the country would benefit from a review of, and hopefully a cut in, beer duty. There is appetite—quite frankly, thirst—for the Government to look at this.

Growth in the economy is vital, and we are offering a solution to try to grow the economy and support local communities. I hope the Minister asks his officials in the Treasury to redouble their efforts to work with the industry, improve EPR, and ensure that we have a thriving hospitality sector.

I do have some sympathy for the Minister, who was wheeled out to outline the winter fuel allowance U-turn and now again to try to defend taxing pubs more than we should. He talks about the financial impact, but when he goes back to a pub in Swansea, I hope he considers the benefits of a review. I know he has not committed to a review today, but were the Government to review beer duty in advance of the next Budget, it could have both financial and community benefits that I hope he will ponder over his next pint.

Question put and agreed to.

Resolved,

That this House has considered beer duty.