Tax move threatens to drown last black beer

The Government’s draft Finance Bill 2012 is looking to reverse the 1931 law, as part of a package of measures to repeal tax reliefs that are deemed no longer necessary

The move is part of a drive to simplify the tax system.

Mather’s Black Beer, which is produced in Huddersfield and dates back to 1901, is the last known surviving Black Beer in the UK. About 35,000 bottles are made annually. It is owned by Continental Wine and Foods (CWF), which bought the brand in the 1990s.

Black Beer, which has an eight per cent alcohol volume, is generally used as a mixer, with lemonade or milk and is mainly drunk by over 65s in Yorkshire.

Tax relief is due to come to an end from April 2013. CWF said a bottle which currently costs just over £2 could rise by £1.64 even before additional VAT was applied.

In the draft legislation, HM Revenue and Customs admitted the move would have a “negligible” impact on the Exchequer but would be “negative” for CWF and its customers.

“Evidence from the consultation suggests that there may be an impact among the over-65s who consume Black Beer if the retail price of the product increases, perhaps reducing the number of people who remain loyal to the product,” it said.

It added: “The withdrawal of the duty exemption will have a negative impact on the sole producer of Black Beer. It will make the product more expensive making it less affordable, particularly for consumers of pensionable age.”

In a statement, CWF said it was “extremely disappointed” with the announcement. “It actually states that the move will have a negligible impact on revenue going into the Exchequer, which begs the question why make this move?” it said.

“Yet again the people who will feel the most impact are consumers. CWF fears the long-term impact this move will have on the Mather’s brand, the last surviving Black Beer in production in the UK. This decision surely cannot be representative of a government that claims to be supporting a revival of British manufacturing.”