Alcohol-related taxes in 1870

Tax. It’s been one of the driving forces behind the evolution of beer styles. Often in connection with war, which is obviously an expensive business.

In the days before income tax, the money raised from alcohol formed the backbone of the UK’s finances. As we’ll see in the numbers. Taxes were levied in a variety of ways, not just directly on the products themselves. In fact in 1870 there was no direct tax on beer at all. Instead there was a tax on malt, which, when adjuncts were illegal, effectively does tax beer. What else can you do with malted barley other than make beer or whisky?

Everyone concerned with the production and sale of alcohol required a licence. From the maltster to the publican. These licences brought in a tidy sum for the treasury - £1.64 million in 1870. That was for almost 360,000 licences in total, meaning an average of £4.50, which was a decent sum back then. Though, obviously, not all licence cost the same. A beer house wouldn’t be paying anything like as much for its licence as a brewer or a distiller.

Why would a maltster need a licence? Because the malt tax was collected from them. And although there were more than 5,000 of them, this was still far fewer than the 32,000-odd brewers. Which is one of the reasons the tax was levied on malt rather than beer. In the 1830’s there were far too many breweries for the Excise to check up on them all.

The change in 1880 to a tax on beer proportionate to its gravity was only practical due to a massive decrease in the number of breweries in the second half of the 19th century. In 1838 there were 49,200 in the UK but by 1880 this had more than halved to 21,131 and by 1882 it was just 15,569*. The fall was mostly due to publican brewers abandoning brewing. Many of these brewed tiny amounts – fewer than 50 barrels a year.

Obviously 15,000 was still a lot of breweries for the Excise to check up on, but only 2,000 or so of them brewed more than 1,000 barrels a year. They were responsible for the vast majority of beer produced and were presumably the ones the authorities kept an eye on.

The total amount raised from alcohol-related sources in 1870 was £22,938,015, while the total tax revenue was around £70.6 million. Meaning just shy of a third of all tax was from alcohol.

I was surprised at the small number of distillers. Even combining them with rectifiers there are only 312. My guess is that today with all the trendy new gins the number is far in excess of that figure. It must have been good news for the Excise as spirits were resposible for half of the alcohol-related taxes. A nice small group to check up on.

Also shockingly few in number are the malt roasters, a mere 21. This was a very highly controlled group and they were all sorts of weird rules about how far away from maltings they had to be. The fear of the Excise was that they would roast unmalted barley as a tax dodge.

I’m not totally sure what all the different groups were. Beer retailers refers to fully licensed pubs and beer houses. But what was a beer dealer? And what the hell were refreshment houses?

I never seem to run out of unanswered questions.

Alcohol related licences in 1870
	number
Brewers' licenses issued	32,682
,, using sugar	1,124
,, (retail) under Act 5, Geo. IV. c. 54	34
Maltsters	5,417
Beer dealers	10,836
Beer retailers	137,937
Spirit dealers	9,522
Spirit retailers	97,077
Distillers of spirits	142
Rectifiers of spirits	170
Wine dealers	57,566
Roasters of malt	21
Refreshment houses	6,626
Passage vessels	393
Dealers in roasted malt	12
Yielding a total gross sum to the Imperial Revenue from licenses alone of	£1,641,485 18 8
The same official document shows the following returns of Customs’ Duties, viz. :—
Spirits and articles containing spirits—gross total sum produced	£4,195,026 0 0
Wine do.	1,478,862 0 0
And for Excise as follows :
Malt duty	6,874,468 11 11.25
Spirits duty	11,427,614 11 7
Source:
"Brewers' Guardian, vol. 1, 1869", July 1871, page 29.

* "Journal of the Institute of Brewing, vol 7", 1901, page 64
** “A Practical Treatise on Malting and Brewing” by William Ford, 1862, page 277.