Brewery wins first round in beer tax battle

ONE of Britain's oldest and best-known independent brewers yesterday won a vital battle in its attempt to challenge the Government over tax on beer.

In a hearing at the High Court in London lasting no more than one minute, Shepherd Neame was granted the right to take its case to a full hearing at the Court of Appeal.

The brewery's battle to force the Government to reduce duty on beer could ultimately be placed before the European Court of Justice.

In an ironic twist, the brewery's legal battle against the Government was led by Cherie Booth QC, wife of the Prime Minister. She agreed to head the legal team after Michael Beloff QC was called away to America on business.

Yesterday the Vice Chancellor, Sir Richard Scott, gave the go-ahead for a full hearing without listening to any argument from Shepherd Neame. He said he felt the case could have "constitutional implications".

At the heart of the Kent brewery's case is its belief that duty on beer should be the same across Europe.

At the moment there is a broad range of duty, ranging from just a few pence a pint in beer-loving Germany to 40 pence a pint in beer-loving Ireland. In Britain, the Treasury receives 32p on every pint of beer sold in a pub.

Shepherd Neame argues that this not only hits the brewery directly, but also encourages drinkers to bulk-buy beer on the Continent where the prices are much cheaper. It said the scourge of cross-Channel bootleggers was well-known.

The brewery believes the Government is in breach of European laws that require states to harmonise duties across the European Union.

Stuart Neame, vice-chairman of the company, said that disproportionate rates of duty were severely affecting British brewers.

"One in every 20 pints of beer sold in Britain comes from Calais, but in Kent the figure is one pint in every three," he said.

"Since 1993 when the Treaty of Rome said there should be a harmonisation of duty rates we have been forced to sell or close 50 of our pubs. Every pub in Kent has lost one quarter of its trade since that date.

"I think the situation is worse in Kent, but it is having a knock-on effect across the whole of the country." Mr Neame, who said that 600,000 people were employed in public houses, claimed the Government would also lose out on millions of pounds in duty if pubs were forced to shut.

But he added: "The fact that she [Ms Booth] is the Prime Minister's wife has nothing to do with her as the choice to fight the Government over their rates of tax on beer. But the irony is not lost on me."

Rates of duty

Ireland 40p

UK 32p

Netherlands 8p

Belgium 7p

Italy 6p

Portugal 5p

France 5p

Germany 4p