It is Time for More British Craft Beer. It is Time for More British Brewers and More British Brewery Employees

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<ul><li> Slide 1 </li> <li> It is Time for More British Craft Beer </li> <li> Slide 2 </li> <li> It is Time for More British Brewers and More British Brewery Employees </li> <li> Slide 3 </li> <li> The most important factors that led to the growth of small, craft brewers in the US The significant change that has come from the consumer 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 retailers. </li> <li> Slide 4 </li> <li> 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. </li> <li> Slide 5 </li> <li> What do policy makers need to do to maximize the number of jobs in the industry Implement policies that encourage the maximum number of players. Look at barriers to entry and on- going 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. </li> <li> Slide 6 </li> <li> The sweet spot Meaningful, graduated excise taxes (US) / duty (UK). </li> <li> Slide 7 </li> <li> 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 </li> <li> Slide 8 </li> <li> 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) </li> <li> Slide 9 </li> <li> 1700 small US brewers Up to 19,999 hl95% 20,000 to 51,132 hl 3% 51,133 to 99,999 hl 1% 100,000 to 499,999 hl -1% 500,000 to 1.99m hl -1% Above 2m hl -1% Many brewers have built capacity up to the 51,132 limit </li> <li> Slide 10 </li> <li> 500 SIBA brewers Up to 999 hl49.1% 1,000 to 4,999 hl35.1% 5,000 to 29,999 hl14.5% 30,000 to 200,000 hl 1.3% Nearly 85% of UK small brewers are below the 5,000 hl threshold. </li> <li> Slide 11 </li> <li> 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. </li> <li> Slide 12 </li> <li> British beer drinkers want to drink more beer from small and medium size British brewers that employ tens of thousands of British workers </li> </ul>