Thursday 25 June 2020

Permitted output yet again

Companies' annual meetings can be great source of information. If you ignore the standard grumblings about the rate of taxation.  Something which features in pretty much every chairman's statement for the whole of the 20th century.

The following is taken from the annual report of William Hancock, one of the large breweries in Cardiff. When acquired by Bass Charrington in 1968, they owned over 500 tied house. Making them a large regional brewery.

"During the year in question the output of the company's breweries has been restricted to at 85 per cent. of the output for the year ended 3lst March, 1946, but in January, 1948, the output was further restricted to 82 per cent. of the output for the year 1946.

As a result of application to the Ministry of Food, an extra allocation was allowed in May of this year to firms operating in industrial areas, so we are now restored to the position at which we started. Even so, it is inadequate for our requirements. It is true, I think, that taking the country as a whole there has been a substantial fall in output of beer in recent months, although in this area, at any rate, the demand exceeds the permitted output for our beers, and the reason for the fall in output is that there is less money about, much less than there was a year ago. When the War came to an end people spent money freely, so that in recent months savings that had been effected in the War had largely been spent. Perhaps the culminating reason can be found in the two Budgets of November, 1947, and April, 1948. In both these Budgets there was a large increase in taxation on cigarettes and beer. There is no doubt that taxation on these two items has reached saturation point, and, in fact, even gone beyond it. There was also an increase in taxation on spirits but as spirits, or at any rate, whisky, has been in very short supply for a long while now, this would only be felt by comparatively few people, and nothing like to the same extent as the effect of taxation on beer and cigarettes.

The resultant cost of beer and cigarettes has now reached a totally unreasonable figure and a reduction in trade, therefore, can be expected, but, in view of the popularity of our own beers, I do not think we shall feel the effects for the time being, and I am hopeful that we shall still be able to maintain our output."
Western Mail - Friday 17 September 1948, page 1.
Fascinating that industrial areas were allowed an extra allowance of output. Though it's not clear by what is meant by "restored to the position at which we started". Was that the 85% of 1946 output or was it 100%?

The tax increases mentioned were the first since 1944 when the rate had been set at 286s 5.5d per standard barrel. This was put up to 325s 5d and then 364s 4.5d - quite a considerable increase. The latter rate wasn't in force long, being dropped back to 343s 4.5d in the April 1949 budget.

By 1948, the tax on a pint of beer had more than trebled. As the chairman of Hancock said:

"Col. Gaskell quoted the following rates of duty: Cheaper beers, now 9d. to 10d. (pre-war 3d.)"
Western Mail - Friday 17 September 1948, page 1.
The rate of tax had in fact more than quadrupled - in 1939 it was 80s per standard barrel - but lower gravities meant that per pint it had "only" trebled.

No comments: