Dirty words that take heavy toll on purveyors of purity

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Chancellor hands small breweries a tax lifeline

In the lexicon of microbrewers, who pride themselves on the purity of their product, "excise" and "duty" are the dirtiest words of all.

By levying a uniform tax on a pint of beer, Gordon Brown has hitherto been giving an unfair advantage to the giant breweries who enjoy large economies of scale to produce an inferior product, the independent operators say.

"Duty kills us," says Dipam Patel, owner of Zerodegrees, a microbrewery in Blackheath, south-east London.

The brewery, one of around 30 small-scale operations in the London area, opened in late 2000 after Mr Patel became convinced of the virtues of microbrewing during a trip to California. He has refitted a former flower shop with pizza ovens and German-built brewing equipment costing £250,000.

Zerodegrees, which supplies to a sister bar in neighbouring Bexleyheath, produces 15,000 pints per week of Czech-style pilsner, brown ale, pale ale and wheat beer – varying in strength from 4.2 to 4.8 per cent alcohol by volume.

All the beers are all brewed in broad accordance with Germany's purity laws – the strictest in the world – and cost £2.30 per pint, which staff say is a bargain compared to the majority of "cooking beers" sold in brewery-owned pubs.

Mr Patel said: "I have made this business work by having the food to fall back on. But independent brewers are going out of business at a rate of around one a month because they rely solely on beer sales."

The tax break will enable independent brewers to shave more than £2 off a nine-gallon barrel, which currently sells to pubs and restaurants for £50.

The Society of Independent Brewers believes that as a result small breweries will have more success selling to pubs. They may also choose to invest in their own pubs, thereby regaining a foothold in a market dominated by brewing giants.

Mike McGuigan, a brewing master, said the provisions in the Budget were the culmination of a 15-year campaign to recognise the benefits of the industry's minnows. Mr McGuigan, who was hired from the Brakspear brewery in Henley on Thames, said the small brewer's lot had been helped by the Prince of Wales's recent remarks proclaiming the "pub as the hub" of community life.