Friday, 15 June 2018

Why beer was so expensive in 1961

Ever since WW I, the UK has highly taxed beer. A shocking percentage of the price of a pint was made up of tax. How much exactly? Let's take a look at an example.

Clarke's was a small brewery in Stockport, taken over and closed by Boddingtons in the early 1960s. One of their brewing books survives. It handily includes costs. This is for their Bitter:

Here are those details in handy table form:

Costs of Clarke 1/5 BB per brew (71.25 barrels)
£ s d %
Materials 110 18 11 15.95%
tax 584 14 5 84.05%
total 695 13 4
Clarke brewing record held at Manchester Central Library, document number M693/405/137.

The tax was more than five times the material costs. With such a high percentage of the cost of producing beer fixed in the form of tax, it didn't leave breweries much leeway to compete on price. Except in one way: by getting as much untaxed beer as possible.

A brewery could achieve that two ways. The first was to minimise losses during brewing. Tax was calculated on the volume and OG of wort as it went into the fermenter. There was an allowance of 6% for losses during brewing. A large, efficient brewery could reduce losses to quite a bit less than that. In the example above, 74.64 barrels were brewed and 71.25 were racked, which is a loss of 4.5%. Which means they paid no tax on just over one barrel.

The second way was dogier. That was to reuse stuff which had paid no tax. Such as returned beer, for which brewers received the tax back. Watney were particularly keen on this, using 15% "reprocessed beer" in most of their products.

Here's a breakdown of the costs per pint:

Costs of Clarke 1/5 BB per pint
d %
Materials 1.30 7.63%
Tax 6.84 40.23%
Total cost 8.14 47.86%
Retail price 17

40% of the retail price was tax. That's a pretty hefty chunk. Brewers were resentful of the fact that the governemnt earned considerably more per pint than they did themselves.


Edd Mather said...

Hi Ron , I thought the Clarke's records were at Stockport Library and History Centre on the 2nd floor , or they were when I looked at them last .
Only three different beers though and weirdly the 1/3 & later 1/4 B.B brewed with Mild Ale Malt !!

oldbobscoo said...

How did the politicians "justify" this insane tax? Or was this just business as usual?