Misunderstandings and Myths : HSBD

High Strength Beer Duty has got the beer-blogs alight with indignation, with almost every blogger you can think of pitching in to cry "Down with this sort of thing".

I'd like to point out straight away that I agree with them -- HSBD is misconceived and does more to hobble the burgeoning brewing culture in the UK than it can ever hope to do with problem drinking.

However, I do think that in order to argue effectively against HSBD, we need to be careful to get our facts straight. The things I'm about to point out may seem trivial (and in the ongoing fight against increasing taxation and the anti-alcohol health lobby, they are), but every factual error that is perpetuated by proponents of beer is a sticking point the "other side" can spend precious time pointing at, claiming that the public are being misled, and generally discrediting those who repeat them.

Myth #1: Beers of 7.5% are subject to HSBD
This one's the most prevalent, and it's understandable that it's become the commonly accepted as until a few weeks ago there was no information available on whether 7.5% would be in the higher or lower bracket; it's standard practice for upper limits to be described as "not exceeding X%" and lower limits to be delineated as "exceeding X%", though, so those in the know should have been able to better predict the starting point.

To be absolutely clear : HSBD applies to beers of 7.6% and above.

Myth #2: Beers of 9% pay as much duty as wine at 15%
This simply isn't true. I'm not sure where it started, but I've seen it repeated far and wide.

Wine exceeding 5.5% and not exceeding 15% pays duty at £241.23 per hectolitre of product.
Beer exceeding 7.5% pays duty at £23.21 per hectolitre per cent of alcohol.

What's immediately obvious is that duty on wine and beer works quite differently : wine pays a flat rate based on volume, with categories defined by strength, while beer pays a rate directionally proportional to strength. (Spirits pay duty in the same way as beer, but expressed in a different way. Such are the mysterious ways of HMRC).

Now, to find the point at which beer pays more duty than wine, we need to do a little maths. The equation to determine how much duty is payable on a volume of beer is:

 Duty Payable = Volume x ABV x Rate

Now, if we plug in the numbers for 1 hectolitre of wine and rearrange the equation, through the magic of algebra we find that beer does not overtake wine of 15% until the beer exceeds 10.3% ABV (ie beers of 10.4% and above are more expensive duty-wise than wines of 15%).

However, breweries eligible for small brewers relief only pay half the basic rate, and so while they pay the full amount of HSBD (for a total rate of £13.93 per hectolitre per cent of alcohol), they don't pay more duty than 15% wine except on beer of 17.4% or greater, and 17.4% wine pays a higher rate again.

What renders this argument even more open to criticism is that it focusses on one end of the scale -- while a brewer pays about the same duty on his 10.3% triple imperial stout as a vintner does on his 15% Merlot, the vintner pays the same rate on his 5.6% made wine.

A handy graph

As can be seen from the graph, small brewers pay less than vintners (for the same volume of product) all the way up to 22%*

The reason I think it's important that we (ie those who oppose HSBD) stop using this argument is that it's terribly weak. It could just as easily be turned on its head and be used as an argument for lower duty for wine at 5.6% (or even higher duty for beer at that level). There is no worse enemy than an ally who makes bad arguments.

Rearranged for direct comparison

This graph shows that Wine generally pays much more duty per unit of alcohol than beer. Once we get to super-strengths, of course, beer from non-small brewers pays much more but talking about 15% wine ignores the other end of the spectrum.

What next?
We're all on the same side; none of us like the High Strength Beer Duty, but it doesn't serve any of us to get the facts wrong. I disagree with CAMRGB on a fundamental and daily basis, but one thing they've got right is the e-petition against the "October beer tax" as he terms it.

If you haven't already, go and sign it. It'll take two minutes and it might just make a difference.

*The graph stops there as wine pays spirit duty above 22%, and the HMRC website is contradictory on the subject of beers of that strength. Some pages say it too pays spirit duty, while the main page on beer duty is silent on the matter.

Buy their beer, not their hype

When I started this blog a month or so ago it was supposed to be for me to write about something I'm passionate about, ie beer, as well as other subjects as they took my fancy. Unfortunately it appears my natural tendency to procrastination and a certain brewer's ability to get attention means it's turned into something of a single-issue publication.

I've made myself the promise that after this post the next two or three will have nothing to do with BrewDog. After this one...

Obfuscation
Yesterday, a post was made to the BrewDog Blog. The front page of the blog carries the emotive (and false) statement that "BrewDog [are] banned [from GBBF]". It's false because they aren't; GBBF organiser Marc Holmes has stated that BrewDog are welcome to reapply for 2012.

The blog proper goes on to say that an agreement had been made for BrewDog to supply "kegged" beer to GBBF. This isn't (wholly) true either, or rather it uses language that many perceive to mean one thing, when in fact it means another.
Let me explain. CAMRA does not specify the type of container necessary for the beer within to be "real ale" by their long-standing and clear definition. Provided the beer "undergoes secondary fermentation in the vessel from which it is served" and is served such that no extraneous CO2 comes into contact with the beer, it satisfies the definition. It's worded that way because it encompasses bottles, casks, and yes, even kegs. The "kegged" beer BrewDog were going to supply wasn't "kegged" in the sense that it was dead, pasteurised, or overly filtered, it was "kegged" because the vessel they wanted to supply it in was called a "keykeg".

In other words, the beer BrewDog agreed to supply would be identical in every way to "real ale" served in a cask, with the only exception being that the container is called a keg, not a cask.

The blog then goes on to say that it is "[i]ronic that if Scotland was independent, we would qualify as foreign and could serve anything we wanted there." This isn't true either. The external policy document that tells CAMRA beer festival organisers what they may or may not stock at the festivals allows beers that do not satisfy CAMRA's definition of real ale to be stocked if and only if the country of supply does not have a tradition of cask-conditioned products. Scotland's tradition would not change overnight if independence were to be gained.

The blog then expresses surprise that CAMRA care if the beer contains a minimum amount of live yeast. I say "expresses surprise", what I really mean is "tests credulity by claiming to be surprised". CAMRA have made no secret of what they consider to be "real ale", and that is beer that undergoes secondary fermentation in the cask/keg/bottle/dustbin/prosthetic limb from which it is served. Live yeast is necessary for this process, as every schoolboy knows.

Size Matters
The next point of contention (and closer to the apparent truth of the dispute) is the size of the containers used. GBBF is a massive event, with a huge number of attendees. This means that it needs a lot of beer, and small containers mean that they have to be changed more often.

Last year, as the blog rightly points out, Thornbridge supplied 9g firkins. This was a trial to see if it worked, as ordinarily 18g kilderkins are used. It didn't work, and this year everyone has been asked to supply 18g containers.

It seems that originally the agreement was that BrewDog would supply 50l containers. These are approximately 11 gallons, a standard size for kegs. Unfortunately, keykegs are only available in 20 or 30l sizes (4.4 and 6.6 gallons respectively). The idea that a festival that has rejected 9 gallon containers due to the impracticalities involved could instead use a container 33% smaller was apparently rejected by the festival organiser.

This dispute over container size resulted in an extension of the payment terms; brewers with bars were to have all monies paid to GBBF by 27th May, but due to the difficulties in agreeing an order BrewDog were granted extra time. During this extension, James (according to Marc) offered to supply some beer in 18g casks if the rest of the order was accepted in 30l keykegs. James says that this isn't the case.

By the time 13th July came around, some two weeks before delivery was expected, I'm told by Marc Holmes that he

"emailed James on Wednesday 13th at 1pm asking him to accept the beer order, giving him a deadline of Thursday 12pm to accept, and Friday 12pm to make the outstanding payment. He responded within hours, not to accept but to continue to argue. He finally emailed to accept on Friday morning at 11am, by which time he had already received the official cancellation letter (which had been posted after 12pm on Thursday)."

This is in stark contrast to the claim made by James in the blog comments that their contract was cancelled before the deadline. Whether James had in fact received the cancellation letter is unconfirmed; whether it was sent recorded I don't know.

It should be noted also that a post to the same effect as the quotation above was made to the BrewDog blog comments shortly before those comments were closed, and that comment is one of a few that have been deleted., despite James' ultimate comment that "all views have had their fair chance".

The second comment here is no longer to be found on the blog

It should be noted that the top comment appears to be a fabrication, made possible by the lack of verification in place in the form used for blog comments.

Hazy

Two things seem clear:

1. The order has been cancelled due to a disagreement between CAMRA (or more properly the GBBF organiser) and BrewDog
2. The core of the dispute is about container size, and not ideological.

The rest is unclear, and never will be until one party or the other published the e-mail exchanges leading up to the deadline. James has posted on the blog comments that BrewDog "have nothing to hide", and so I can see no reason to obstruct such publication. It's the only way we'll ever get anywhere close to the truth, hidden as it is by grandstanding and the apparently deliberately misleading version of events presented.

It amused me somewhat to see a commenter on the blog say that it was unfair of GBBF to expect an agreement when BrewDog were so obviously busy with EFP2. I'd invite that particular poster to check the very first line of the blog, and ask himself how many people have seen it. That may point a finger towards the real reason for this furore.