Beer in 1958 (part four)

It’s time to look at the financial aspect of the brewing industry. And by that I mostly mean tax.

For centuries, the tax on beer has formed a considerable part of its price. And, conversely, the tax on beer has been a vital source of revenue for the government. This was even more the case during the first half of the twentieth century, with two expensive World Wars that needed to be paid for.

“More efficient methods - the brewing industry invests from £8m. to £10m. a year in new plant, buildings, and vehicles, roughly a tenth of its net output — have kept the rise in the cost of making beer to below the rise in the prices of its main constituents and below the rise of prices in general. But prices of beer do not fully reflect this because of the great increase in excise duty, which averaged just over 2d. a pint before the war and now averages about 8d. In the cheapest mild (1s. 2d. a pint now. compared with 4d. until almost the eve of war in 1939) the duty represents almost half the price. According to the Census of Production, in 1951 it represented nearly two-thirds of the value of beer when dispatched from the brewery. The duty is based on the gravity of the malt extract before it is fermented.”
"Beer in Britain", 1960, pages 5 - 6.

Consolidation was responsible for some of the fall in the cost of production. We’ve already seen how average output per brewery rose by around 50% during the 1950’s.

Want to see if they’ve got their numbers right on the tax per pint? I have the odd number or two:

Beer tax 1939 - 1960
Year	Bulk Barrels	Std. Barrels	Tax/Std. Brl	Total Tax £	Tax/Bulk Brl.	Av. sg	tax pint
1939	24,674,992	18,364,156	80s	62,370,034	50s 7d	1040.9	2.11d
1940	25,366,782	18,738,619	80s / 104s	75,157,022	59s 3d	1040.6	2.47d
1940			104s /135s / 165s
1941	26,203,803	18,351,113	135s / 165s	133,450,205	101s 10d	1038.5	4.24d
1942	29,860,798	19,294,605	165s /240s 7.5d	157,254,430	105s 4d	1035.5	4.39d
1943	29,296,672	18,293,919	240s 7.5d / 281s 10.5d	209,584,343	143s 1d	1034.3	5.96d
1944	30,478,289	19,193,773	281s 10.5d / 286s 5.5d	263,170,703	172s 8d	1034.6	7.20d
1945	31,332,852	19,678,449	286s 5.5d	278,876,870	178s	1034.5	7.42d
1946	32,650,200	20,612,225	286s 5.5d	295,305,369	180s 11d	1034.7	7.54d
1947	29,261,398	17,343,690	286s 5.5d	250,350,829	171s 1d	1032.6	7.13d
1948	30,408,634	18,061,390	325s 5d	264,112,043	173s 9d	1032.7	7.24d
1949	26,990,144	16,409,937	364s 4.5d / 343s 4.5d	294,678,035	218s 4d	1033.4	9.10d
1950	26,513,997	16,337,315	343s 4.5d	263,088,673	198s 5d	1033.9	8.27d
1951	24,891,746	16,739,464	321s	249,146,244	200s 2d	1037	8.34d
1952	25,156,489	16,958,628	321s	248,165,812	197s 4d	1037.1	8.22d
1953	24,883,227	16,681,119	321s	243,372,425	195s 7d	1036.9	8.15d
1954	24,582,303	16,525,316	321s	242,031,712	196s 11d	1037	8.20d
1955	23,934,215	16,161,698	321s	237,452,121	198s 5d	1037.1	8.27d
1956	24,551,158	16,618,162	321s	243,682,807	198s 6d	1037.2	8.27d
1957	24,506,524	16,674,001	321s	245,374,441	200s 3d	1037.4	8.34d
1958	24,647,978	16,799,108	321s	246,077,234	199s 8d	1037.5	8.32d
1959	23,783,833	16,226,433	321s	238,722,997	200s 9d	1037.5	8.36d
1960	26,115,012	17,688,007	277s 5d	206,221,271	157s 11d	1037.3	6.58d
Sources:
1955 Brewers' Almanack
1971 Brewers' Almanack
Brewers' Society Statistical Handbook 1988, p.7
Brewers' Society Statistical Handbook 1973, p.11

You can see that the tax did, indeed, come to about 8d per pint. Though this is for a beer of average strength, around 1037º. Ordinary Mild was around 1030-1032º and the tax on it would have been a little less.

Average tax per pint was 2d in 1939. But the cheapest 4d Milds had an OG well below the average of 1041º, usually around 1027º. The tax on a beer of that strength was 1.67d, still a considerable percentage of the retail price.

The rate of tax was remarkably stable: 321s from 1951 to 1959. And then something really unusual happened. Tax fell by almost 2d per pint.

“The scale of tax—which contributed £260m. to the Exchequer last year—is such that the tax rises steeply as beer is made stronger. Some brewers complain that this discourages the sale of the belter beers. But it is likely that the better beers nevertheless usually get a larger percentage of profit, and people do not seem as sensitive about their prices as they are about the price of the successor to the 4d. mild. If the tax is in its form and perhaps in its weight anomalous, it does not dismay the brewers or daunt the enterprise and initiative of this vigorous industry with its 3,000 brands of mild and bitter, pale ale and brown ale, lager, stout and stingo.”
"Beer in Britain", 1960, page 6.

A word of explanation. Tax was levied per standard barrel. A standard barrel being 36 gallons of beer with an OG of 1055º.  Stronger or weaker beers were taxed in proportion to that, so one of 1100º would be double the standard barrel rate, while one of 1027.5º would pay half. It makes strong beers expensive to brew, as the article says. Though before WW I, when the same tax system was in place, there were lots of strong beer about.

More about beer and money next.