Beer tax reduction

Brewers weren't happy when the tax on beer remained at a high level after the end of WW I. Faced with falling beer consumption, they desperately appealed to the government to reduce beer tax and so stimulate demand.

They were eventually partially successful, getting a flat rate 20 shillings per barrel rebate on beer duty. It was far less than they had hoped for, and only allowed beer prices to drop by 1d per pint across the board.

This is a leader article from the first issue of the Brewers' Journal in 1923.

"THE MONTH.
BEER TAX REDUCTION.
For the third year in succession we reiterate the demand for a reduction in the beer duty; never before, however, has the position been so favourable for a successful issue. Two years ago, and even to some extent up to the spring of last year, the brewers' ease was obfuscated by the false cry on the part of our opponents that brewers themselves were responsible for keeping up the price of beer. At that time Lloyd's News typified the outlook of certain newspapers when it said that "the brewers are morally and economically compelled to give the people cheaper beer." The fictional character of this and other similar misstatements has now largely been dispelled by the wise policy adopted by the Trade in putting before the public the irrefutable and unimpeachable facts from our side, which may be summarised in the sentence which has become the slogan of this campaign. "Less duty; cheaper beer." All the ingenuity and all the misrepresentation of our highly organised opponents have not made it possible for any newspaper that has taken up the cry of "cheaper beer" to hold to their primary attestation that brewers were mainly responsible. If only the members of the Trade will redouble instead of slackening their efforts to get the truth to the people, then the ground will be cut under the feet of our opponents when, as assuredly it will be, this question is brought before Parliament."
"Brewers' Journal, 1923", page 1.

Nothing ever really changes, does it? The newspapers are still full of biased shit, especially when it comes to beer. How anyone could truly believe brewers were to blame for the high price of beer is beyond me. You only needed to look at the rate of tax to realise that was bollocks.

The leader went on to explain why beer duty should be reduced:

"The factors and considerations making for the desirability of a reduction in the beer duty accumulate in an increasing ratio with the fluxation of time. Primarily, the case for relief is founded largely on the grounds that the increase in the beer duty, having been the first fiscal act of the war period, raised as it was on no less than six separate occasions, and standing ultimately at a figure thirteen-fold that of 1914, should be the first to receive consideration now that four years have elapsed since the cessation of hostilities. This argument is supported by the fact that the increases in duty were unquestionably part of our temporary war-time emergency legislation. The point could not, perhaps, be put better than in these words, quoted from The Observer of December 31st, 1922:--

The war increases in the beer and spirits duties were, like many other war taxes, of greater social importance, emergency taxes only, and there is probably no intelligent person inside or outside the Trade who has ever imagined that they woirld or could be maintained at the war-time level when the financial condition of the country improved. If the condition and prospects of the national exchequer appear to justify a reduction of the beer duty in April next, the reduction will unquestionably be made.

This from an organ more aggressively teetotal than any other London newspaper is decidedly a useful
declaration." "Brewers' Journal, 1923", page 1.

I never realised the Observer had been a teetotal newspaper. It makes me feel all dirty for having bought it in the past.

The high price of beer was becoming a form of Prohibition for some:

"The undeniable factor of the situation is that tens of thousands of former beer-drinkers have unwillingly been forced into a state of virtual or partial teetotalism by the irrationally increased duty on beer. A form of partial Prohibition has, in effect, been set up, which is no less effective because it is not founded on a Prohibition law and which is certainly class legislation, because it affects the people in direct ratio to their spending power, so that the wealthy are left with the means of possessing alcohol whilst to the poor it has become a luxury instead of part of their daily diet. Whatever may have been the causes which have brought about this condition of affairs, the situation warrants the quotation of John Stuart Mill's pregnant words':—

Every increase of cost is a prohibition to those whose means do not come up to the augmented price.

To tax stimulants for the sole purpose of making them more difficult to obtain is a measure differing only in degree from their entire prohibition, and would be justifiable only if that were justifiable.

"Brewers' Journal, 1923", pages 1 - 2.

There probably were some in the Liberal party who were happy to snealk in a form of partial Prohibition.

Now for some numbers about tax and beer production:

"The statistics show that, whatever the real intentions of the super-taxers of beer may have been, the effect has been to diminish the output in the 12 months ended September, 1922 to 21,892,454 barrels as against 25,501,935 barrels in the corresponding 12 months of the previous year. The output for 1913-14, the  last pre-war year,  was, in  round figures, 36,000,000 standard barrels. The consumption of beer in the present year (ending March, 1923) is estimated at 18,000,000 standard barrels—that is one-half of the pre-war consumption. In a sentence, in the period when the beer duty has been increased by nearly 1,200 per cent., the consumption has decreased by one-half. Surely facts rarely told so graphic a tale. And there is also the fact that even when the enormous increases in alcohol taxation are alone considered, beer stands out as having been unfairly dealt with. Since 1913-14 the following approximate taxation increases have been made :—

Wine (unsparkling)	100 per cent.
Sparkling wines	300 „
Spirits	400 „
Beer	1,200 „

"Brewers' Journal, 1923", Page 2.

That does look pretty unfair on beer. I can't see the logic in increasing the tax on beer three times as much as that on spirits. And it's clear what effect those tax increases had on beer consumption: they halved it.

There were various proposals for how to reduce beer duty:

"Hope of a beer duty reduction runs high in the Trade ; indeed, various schemes supplying a modus vivendi have been prepared. The general basis of such schemes is a taxation reduction averaging -  some schemes putting it higher ami some lower— 35s. to 40s. per standard barrel with a view to enabling a reduction in the price of beers now sold at 9d. and 8d. per pint by 1d., and of beers now sold at 7d. and under, by 2d. a pint, except that the 5d. beer would become a 4d. instead of a 3d beer. Other schemes suggest a 1d. off the lower priced beers and 2d. off the 8d- and 9d. beers. Yet another proposes a 50/- reduction in duty and 2d. off all classes of beers. It is variously estimated that the increase in consumption which would follow in the first fiscal year upon such price reductions would be 15 per cent. to 33 per cent.; in our own view 20 per cent, would be a likely figure."
"Brewers' Journal, 1923", Page 2.

Personally, I think they should have reduced dury by 50/- and reduced the price of all beer by 2d a pint. But that's me talking as a pisshead.

But what would that cost?

"If this increase were borne out in practice, a loss of something like £20,000,000 would be entailed to the Exchequer; but as against this must be set off the normal loss which a continuance of high prices in 1923-4 would undoubtedly bring with it - a loss which we should estimate at round about £10,000,000. These figures are, of course, both tentative and approximate. Naturally, very diverse views are held by different sections of the Trade, who would be differently affected by any reduction in the beer duty. We have merely endeavoured to give an average based on the various schemes which have been advanced, but which must not be taken as embodying the general views either of the Trade or of this Journal on the subject. It seems fairly safe to say, however, that at a cost to the national exchequer of some £10,000,000, the important reductions in the retail prices of beers above, mentioned could be brought about. When the enormous contributions to the national revenue made by alcohol consumers in the last eight years are brought into account, and when consideration is given to the hardships entailed by a continuance of the existing rate of tax, and it is remembered how much the contentment of the masses of the people of this country is bound up with a reasonable beer supply, we do not think that the sum named is one which should stand in the way of the new Government. As it is, we have the declaration of Mr. Stanley Baldwin (Chancellor of the Exchequer) that "beer will certainly be one of the first subjects of taxation to come under review in order to see how far any practicable reduction in duty would benefit the consumer."
"Brewers' Journal, 1923", Page 2.

 The truth is, with Britain's economy still up shit creek, the government couldn't afford a reduction of £10 million in its income. Which is why it never happened. Want to know what did?

This:

Beer output, tax, revenue and retail price 1921 - 1928
Year	Bulk Barrels	Std. Barrels	Tax/Std. Brl	Total Tax £	Tax/Bulk Brl.	Av. sg	price pint	tax pint
1921	34,504,570	26,729,883	100s	123,406,257	71s 6d	1042.61	7	2.98d
1922	30,178,731	23,513,774	100s	121,864,865	80s 9d	1042.88	7	3.37d
1923	23,948,651	18,564,212	100s	92,262,893	77s	1042.72	7	3.21d
1924	25,425,017	19,890,033	80s	76,110,638	59s 10d	1043.04	6	2.49d
1925	26,734,825	20,954,392	80s	75,825,827	56s 7d	1043.12	6	2.36d
1926	26,765,610	21,034,419	80s	76,320,021	57s	1043.23	6	2.38d
1927	25,100,461	19,745,199	80s	78,763,480	62s 9d	1043.28	6	2.61d
1928	25,435,145	19,962,997	80s	77,800,471	61s 2d	1043.17		2.55d
Source:
1928 Brewers' Almanack

As predicted, only 18 million standard barrels were produced in 1923. And, despite the modest decrease in duty, revenue from it fell by £45 million.

Why Lager didn't catch on

This might help explain why British brewers were so reluctant to move to bottom-fermentation. There was an incentive in the system of beer taxation to get beer out of the brewery as quickly as possible, because the tax was paid before the beer had even fermented.

"LAGER BEER BREWERS' GRIEVANCES.
Colonel J. Baldwin-Webb, M.P , has issued the following statement: —

In view of the urgent representations which have been made within the past year to the Chancellor of the Exchequer and to individual Members of Parliament by various lager beer brewers, with regard to what is undoubtedly a real grievance, I have, after consultation with colleagues at the House of Commons, and in conjunction with fourteen of them, suggested the addition of the following new clause to the Finance Bill: —

"The duty of excise and the excise drawback allowed in respect of beer brewed in the United Kingdom under Section 1 of the Finance Act, 1933, shall be reduced as from the first day of July, 1934, by 5 per cent, in the case of beer known as lager beer—that is to say, beer mashed by the decoction process and fermented by a bottom yeast at a temperature of under 45 deg. Fahr."

The supporters of this new clause are Mr. W. W. Boulton, Mr. H. G. Williams, Col. Sir George Courthope, Lt.-Col. Sir Arnold Wilson, Wing-Commander James, Lt.-Col. Heneage, Sir Thomas Rosbotham, Sir Arthur Shirley Benn, Vice-Admiral Taylor, Dr. O'Donovan, Lt.-Commander Bower, Sir Paul Latham, Mr. Mitcheson and Mr. D. G. Somerville.

At least half of these Members belong to the Parliamentary Agricultural Committee and have the interests of farmers no less than brewers at heart.

Until comparatively recent times, lager beer was virtually a foreign monopoly, but manufacturers in this country have been trying to make it an entirely British article, and but for the heavy pressure of foreign competition would have been successful. The home producer has to store his beer for four months, and the high rate of duty entails a considerable loss of interest on the capital so locked up, whereas the. foreign competitor, on the other hand, does not pay duty on the beer until it arrives at the port, and is also able to purchase his raw materials more cheaply.

The lager beer brewers of this country who are endeavouring to build up a British industry feel that they are entitled to some support from the Government.

They have already built up a considerable trade under great handicaps, but a great many of them are beginning to feel that, ii they have to conduct their home trade at a loss in order to compete with foreigners who enter this country under no handicap, they will have to give up what they hold to be an unequal struggle. This would cause unemployment among the makers of British labels, bottles, corks, etc., and among bottlers and casers

While the British lager brew has been struggling against these heavy odds, foreign imports have been increasing. The last available figures show the increases as follow: —

1932-3        22,486 standard barrels
1933-4        32,480 standard barrels

Other trades could, of course, go before the import Duties Advisory Committee and obtain protection for their business, but, owing to the technical point that beer is a dutiable article, the lager beer brewers are not entitled to do this. Nevertheless, they feel very strongly, that they are entitled to some protection, since their trade has greatly benefited other British industries. For instance, one firm I have in mind spent £70,000 last year for its export trade alone in purchasing glassware, labels, etc., of British manufacture, and, in addition, paid over £30,000 in freights to British shipowners. Failing other means of assistance, various British lager beer brewers have urged me to take up their case in the House of Commons, but as a Private Member is not entitled to move any clause or amendment to impose fresh taxation, my colleagues and I have adopted the alternative of pressing for a reduction in the excise duty.
June 6th, 1934.
House of Commons.
[The  new  Clause  was considered in the House Commons  on  the 12th inst., and negatived.—ED
"B. J."]"
Brewers' Journal 1934, page 324.

Of course they got nowhere with this proposal. One of the problems was how to decide what was Lager and what wasn't. The amendment suggested a decoction mash and a cool bottom fermentation defined Lager. Odd that lagering didn't get a mention. I'd have thought that was a key part of the definition. Especially as it was this long storage that financially disadvantaged Lager brewers.

In the 1960's and 1970's the extra costs involved with lagering were given as an explanation of the higher proce of Lager compared to top-fermenting beers. Bullshit, obviously, as very little lagering was going on by then.

The extra cost in brewing Lager must have been a disincentive to switch to bottom-fermentation. Especially at a time when brewery profits were under pressure. Anyone making such a bold step risked being undercut by competitors who stuck with top fermentation.

Those figures for the imports of Lager aren't 100% precise. As the official figures didn't record the type of beer, they just assumed that all beer coming from Denamrk, Holland, Germany and Czechoslovakia was bottom-fermenting.

Charrington buys Hoare

So you remember the Toby jug symbol? It was all over Charrington pubs back in the days when hair was long and flares were wide. I didn't realise that it hadn't been their trademark originally. They'd only acquired it in 1934 with the purchase or Hoare.

Hoare had been one of the big boys back in Porter's heyday, brewing more than Barclay Perkins in 1748. In the second half of the 18th century they slipped behind Barclay Perkins, Combe, Whitbread and Calvert and never quite managed to break through the 100,000 barrel barrier, their output peaking at 97,600 barrels in 1796*. In the early 19th century they produced 60,000 to 70,000 barrels a year and were most definitely in the second division of London brewers.

Charrington was the first London Ale brewer to break into the big time. As public taste moved from Porter to Mild Ale in the second half of the 19th century, they expanded rapidly. The purchase of Hoare cemented their position as one of London's leading brewers.

Now we've done the contextualising, here's the article:

"CHARRINGTON AND CO., LTD.
Trade Conditions and the Beer Duty.

The ordinary general meeting of Charrington and Co.. Ltd. was held on the 10th inst., at the Anchor Brewery, Mile End, London, E.

Mr. Cecil E. W. Charrington, M.C. (the chairman of the company), presided.

I do not propose to go into the details of our deal with Messrs Hoare and Co., for the simple reason that it would take a very long time. The negotiations were very long and intricate, but I may say at once that the terms were accepted by both sides with a minimum of disagreement. As regards Messrs. Charrington and Co.'s Ordinary and Preference shareholders, although they did not all agree, not a single one objected; and in the case of Messrs. Hoare and Co. (there were only Ordinary shareholders there), less than half of 1 per cent, objected. Therefore, I think we can congratulate ourselves, in an amalgamation of this size, that the two bodies of shareholders came to such an amicable agreement.

The net result of this big "deal" has been a very large increase in the company's liabilities, but I trust it has also been a very valuable addition to our assets. I may say that the directors of Charrington and Co. did not enter lightly into these new commitments, nor did they very willingly put an end to what had been for 150 years an almost purely family business, but they considered that an amalgamation with a firm of the same size and standing as themselves would in the long run be in the best interests of the company.

The issue of the £4,500,000 Debenture stock at 98 we can consider, I think, on the whole, quite satisfactory. I am well aware that it we were going into the Money Market at the present moment we could get better terms, but we must not forgot that if we had wanted to raise this large sum of money only three or four years ago we should no doubt have had to do so on a 5.5 per cent, basis. I think we can congratulate ourselves that we were able to issue the debentures at 4 per cent. None of the prior charges bears a higher rate than 4 per cent.

Now, as regards the trading conditions of the year. You will have gathered from the printed report that the first four months of the year were extremely bad. The "Snowden" tax of 1931 had a very damaging influence on our trade when it started, but it had an increasingly severe effect as time went on. - The first four months of last year were quite the worst period for trailing that we have experienced since the war. Our barrelage dropped very considerably until about the end of April, 1933; the increase in the last eight months of the year did not quite make up the leeway lost in the first four months. Unfortunately, the present Chancellor of the Exchequer took eighteen months instead of only six to find out the great mistake his predecessor had made. When he did find it out, 1 think he met the situation fairly He said: "The public are to get their beer cheaper, but I am going to ask the brewers to do something for me" —and he asked us to increase our gravity by two degrees and  to  use  more  British  malt. Well, that was an expensive matter to brewers, but it enabled us to inform the public that beer would be "cheaper and better" and good advertising can never be had for nothing.

The continuance of the policy has been strongly recommended by the Brewers' Society, and is being strictly adhered to by this company.

The "Snowden"  tax, besides damaging the brewing trade and threatening the Exchequer with consistently diminishing returns on the beer duty, hit the retail trade with exceptional severity. While we have made considerable reductions in our rents of licensed property, I regard it as a very real grievance on the part of the licensed victualler that no reduction has beer made in the licence duties.

With regard to our beers, during the past 12 month they have been excellent. In taking over this large increase in trade we are installing the very best plan available, for I do not believe it is ever good policy to do anything which might interfere with the quality of the article produced. We have a very fine site, and one which has proved readily capable of expansion.

As regards our licensed property, we have spent last year about an average sum on repairs to houses and on rebuildings of old properties, and on the erection of modern public-houses. I hope they will be well patronised by our shareholders and the public at large.

It is really outside my scope, I think, to deal with the closing down of the Red Lion Brewery and the concentration of the work here at the Anchor Brewery but I feel sure you would like to know that we run already taken over the supply of a large number of the houses that were supplied by Messrs. Hoare and Co.

There is one more matter to which 1 ought to refer, and that is the matter of compensation for the staff of Messrs. Hoare's Brewery. It was part of the terms of our "deal" with Messrs. Hoare that a definite lump sum should be guaranteed by Charringtons for that purpose, and that sum was agreed at £25,000. I do not think that that will be an adequate amount, but that was the sum agreed on; if necessary we shall, course, add to it. But it is only right for me to tell you that during his lifetime Sir John Ellerman, without making a definite promise, said he would like out his own pocket to add to that fund. Unfortunately, he died very shortly after the "deal" was completed but his executors felt that they would be carrying out his wishes (and they were entitled to do so under the terms of his will) by dealing with the matter; they have most generously promised to grant the sum of £20,000 towards that fund."
Brewers' Journal 1934, page 280.

It's no surprise that Hoare's Red Lion Brewery was closed straight away. Charrington had a modern brewery of their own not far away. Supplying Hoare's tied estate wouldn't be a problem.

Wondering what the "Snowden tax" was? A salutary lesson for greedy governments, that's what it was. In 1931 Philip Snowden, Labour Chancellor of the Exchequer, raised beer duty from 84 shillings a standard barrel to 114 shillings. What happened next? Brewers cut gravities so the retail price could remain the same and the revenue raised actually fell. The tax collected didn't return to its 1930 level until 1940.

Tax and beer output 1930 - 1938
Year	Bulk Barrels	Std. Barrels	Tax/Std. Brl	Av. sg	Total Tax £
1930	25,061,956	19,550,867	80s	1042.9	71,254,674
1931			114s
1932	20,790,812	15,514,209	114s	1041.04	68,710,020
1933	17,950,303	12,658,324	114s	1039.52	67,097,581
1934	20,182,308	15,043,120	80s	1040.99	53,884,405
1935	20,864,814	15,577,836	80s	1041.06	53,582,335
1936	21,969,763	16,386,985	80s	1041.02	55,451,926
1937	22,724,450	16,985,231	80s	1041.1	57,318,585
1938	24,205,631	18,055,539	80s	1041.02	61,241,404
Source:
1955 Brewers' Almanack, page 50.

Eventually the tax was dropped back to 80 shillings when the brewers agreed to raise gravities.

Given the slump that it caused in beer production, the tax rise and Hoare's decision to sell may well have been connected.



* “The Brewing Industry in England 1700-1830”, Peter Mathias, 1959, p 551-552

British beer legislation 1802 - 1899

I tripped over this useful summary of the legislation around beer during the 19th century while wandering blindly in the darkened cellars of my book collection. I'd cut it out and keep it, if I were you. Bound to come in handy during some bitter argument.

This isn't a direct quote, just my paraphrasing of the original text.


Summary of Legislation

1st May 1802 - 20th June 1811
No materials other than malt, hops and water allowed.

26th June 1811 - 5th July 1817
Porter brewers were allowed to use a solution of burnt brown sugar to colour Porter only.

6th July 1817
The burnt colouring solution was forbidden and only malt, hops and water were allowed. Brewers, retailers and dealers of beer were not allowed to possess sugar nor certain specified drugs and adulterants.

11th October 1827
The rules from 6th July 1817 also applied to Ireland.

16th July 1830
Beer duties abolished. Brewers prohibited from having raw or unmalted grain on their premises.

18th June 1842
The use of roasted or black malt in brewing first recognised in law.  Strict rules on the manufacture, sale and storage of black malt were introduced. There was further legislation on this topic in 1856 and 1857. All these were repealed in 1880. 

23rd February 1847
The use of sugar (but not molasses or other types of sugar on which the full duties had not been paid) allowed in the brewing of beer and in the preparation of colouring material for beer.

6th July 1851
A duty of 1s 4d per cwt. introduced on sugar used in brewing.

10th July 1854
Duty on sugar used in brewing raised to 6s 6d per cwt.

1855
Duty on sugar used in brewing reduced to 3s 9d per cwt.

5th July 1856 - 15th April 1864
Collection of duty on sugar used in brewing held in abeyance.

16th April 1864
A duty of 3s 4d per cwt. imposed on sugar used in brewing.

30th April 1867
Duty on sugar used in brewing raised to 3s 6d per cwt.

12th April 1870
Duty on sugar used in brewing raised to 7s 6d per cwt.

8th May 1873
Duty on sugar used in brewing raised to 9s 6d per cwt.

30th April 1874
Duty on sugar used in brewing raised to 11s 6d per cwt.

30th September 1880
Duty on sugar used in brewing repealed.

31st July 1865 - 30th April 1874
Brewers prohibited from using a mixture of glucose and treacle.

30th April 1874
The definition of sugar extended to mean any description of sugar, including any saccharine substance or syrup manufactured from any material from which sugar can be manufactured. The use of sugar to make beer colouring also allowed.

14th August 1855 - 30th September 1880
Storage of unmalted grain in a brewery prohibited except for: grain in a malt house; oats or beans for horse food kept in a specific place. Malt only to be crushed by metal rollers with smooth surfaces which were not fluted.

11th October 1862 - 30th September 1880
Brewers of spruce or black beer exempted from new rates of license duty on brewers provided that they used no hops or yeast in making them.

16th September 1862
Duties on hops repealed. Prohibition on hop substitutes removed, also the restrictions on importing extracts, essences and other preparations of hops. This was only extended to Ireland on 25th July 1864.

1st October 1880
"Free mash tun " Act. Duty imposed at 6s 3d per standard barrel of 1057º. All restriction on ingredients removed except those on drugs and harmful substances.

16th May 1888
The use of "saccharin" (a product of coal tar) prohibited.

16th April 1889
A standard barrel changed to 1055º.

17th April 1894
Duty per standard barrel raised to 6s 9d.

1st October 1896
Rice, flaked maize and other similar products, which had been classified as malt or corn with regard to their wort-producing powers reclassified as "sugar".

Source: "Report and minutes of evidence Departmental Committee on Beer Materials", 1899, page 382.

That was fun. Se how most of it was designed either to collect tax or to stop people avoiding tax.

The "Report and minutes of evidence Departmental Committee on Beer Materials" is a great source of information, especially statistics. There are several appendices stuffed full of plump, juicy numbers. I had to tear myself away.

Notes on Changes in Trade

Whitbread kept a spreadsheet of their sales. In old-fashioned pen and ink form. I wish I'd had time to photograph it all.  The first few pages are text. Entitled "Notes on Changes in Trade".

Here's a snippet:

For the lazy:

July 1931 Liverpool started clear ale.
July 1931 Birkenhead started clear ale.
July 1931 Manchester started clear ale.
Sept 1931 Economy Budget. Duty increased by 31/- per barrel
Sept 1931 W & Co. [Whitbread & Co.] Bottled Beer prices increased by 1/- per doz. pints; 6d per doz. half pints; & 8d per crate, except LS & LOS which are not changed in price, but the gravity reduced from 1055º to 1047º
Sept 1931 Bass Bottled Beer increased by 1/4d per doz. pints; 8d per doz. half pints
Sept 1931 Guinness Bottled Beer increased by 1/4d per doz. pints; 8d per doz. half pints
Sept 1931 Cask Beer. X.A. started at 118/- per barrel. K.K. & Stout withdrawn. Replaced by X.X.X. & L.S.

This is what happened when there was a sudden rise in beer duty. In some cases, the prices went up, in others the gravity went down. Net result: less tax income for the government.

This was the end of the road for Whitbread's KK and Stout. Beers that had been around since the early 19th century.

I don't know what XA was. I haven't seen it in their brewing records. Weird.

The clear ale stuff is, I believe, when various bottlers went over to carbonated rather than naturally-conditioned bottled beer.

Depression

I keep telling you what a massive effect WW I had on British beer and brewing. But there was another, non-war-related event that had a considerable impact. The Great Depression.

Once the dust had settled after WW I, average gravity had dropped by about 10º from its pre-war level. It remained at around 1043º until 1931, when a big rise in beer duty (from 80s to 114s per standard barrel) prompted brewers to cut gravities to avoid increasing the price of a pint.

The uneven approach of brewers to the tax increase - dropping the gravity of some styles, such as Mild and Porter, increasing the price of others like Bitter - widened the gap in strength between the cheap and expensive beers. In 1923, Whitbread's X Ale had an OG of 1042.1º and its PA 1046.4º. In 1933, X was 1036.1º and PA 1048.8º.

The tax increase was reversed in 1933, but gravities never got back to their old levels, remaining around 1041º. Nor did the government's tax revenues. As you can see from the table below.


In the 1920's, X Ale (standard Mild) cost 6d a pint and had a gravity of around 1042º. After the tax increase, the gravity dropped to 1036º and the price remained at 6d a pint. When tax went back to 80 shillings a barrel in 1933, brewers left the gravity the same and dropped the price to 5d a pint. Drinkers couldn't have complained that much about their Mild tasting watery.

There were two classes of Bitter, one which sold at 7d a pint and had a typical gravity of 1046º, the other was 8d a pint and 1053º. In the early 1930's, the stronger version mostly disappeared. Mostly just a single Bitter was sold, at a price of 8d a pint and with a gravity of 1046º.

Draught Strong Ale (or Burton) was, before 1930, always 8d a pint and about 1053º. After the tax rise, there are two different types. One that cost 9d a pint and had the old gravity. The other was 8d a pint and 1046º. When the tax fell again, the price of each type was cut by 1d.

Perspective. Like I was saying the other day, perspective is what you need. There present times may be difficult for British brewing, but it's survived worse in the past. Increasing beer tax in an economic recession isn't likely to equivalently increase government revenue. Demand for beer isn't that elastic. As the early 1930's demonstrate. It took the industry the best part of 10 years to recover from an injudicious tax increase. I wonder how long it will take this time?

Another nail in that IPA myth

Thanks to reader Gary Gillman for helping me stumble across this one. I'm back to the "IPA was brewed strong so it could survive the journey to India" myth. It pisses me off so much every time I hear it repeated. I'm going to keep shouting the opposite until people start paying attention.

The following passage gives a very different reason for IPA being the strength it was:

"ALE, PALE OR BITTER; brewed chiefly for the Indian market and for other
tropical countries.—It is a light beverage, with much aroma, and, in consequence of the regulations regarding the malt duty, is commonly brewed from a wort of specific gravity 1055 or upwards; for no drawback is allowed by the Excise on the exportation of beer brewed from worts of a lower gravity than 1054. This impolitic interference with the operations of trade compels the manufacturer of bitter beer to employ wort of a much greater density than he otherwise would do; for beer made from wort of the specific gravity 1042 is not only better calculated to resist secondary fermentation and the other effects of a hot climate, but is also more pleasant and salubrious to the consumer. Under present circumstances the law expects the brewer of bitter beer to obtain four barrels of marketable beer from every quarter of malt he uses, which is just barely possible when the best malt of a good barley year is employed. . With every quarter of such malt 16lbs. of the best hops are used ; so that, if we assume the cost of malt at 60s. per quarter, and the best hops at 2s. per lb., we shall have, for the prime cost of each barrel of bitter beer—in malt, 15s.; in hops, 8s. ; together, 23s ; from which, on exportation, we must deduct the drawback of 5s. per barrel allowed by the Excise, which brings the prime cost down to 18s. per barrel, exclusive of the expense of manufacture, wear and tear of apparatus, capital invested in barrels, cooperage, &c., which constitute altogether a very formidable outlay. As, however, (his ale is sold as high as from 50s. to 65s. per barrel, there can be no doubt that the bitter ale trade has long been, and still continues, an exceedingly profitable speculation, though somewhat hazardous, from the liability of the article to undergo decomposition ere it finds a market."
"Ures' Dictionary of Arts, Manufactures and Mines" by Andrew Ure & Robert Hunt, 1867, Page 306

A word of explanation. "Drawback" was the money refunded to a brewer when beer was exported. The idea being that excise duty was only payable on beer consumed in the UK. It was a bit complicated in the period 1830-1880 because there was no tax as such on beer. It was the raw materials, malt and hops, which were taxed. Hence working out how much tax had been paid on a particular barrel of beer wasn't easy. So instead there was a simple flat-rate refund.

Anyway, what Ure is saying is that it made no financial sense for a brewer to export an IPA with a gravity lower than 1055, as he wouldn't get his 5 shillings a barrel back from the taxman. He implies that without this rule, the gravity of export IPA would have been lower.

I'm intrigued by his assertions that a Pale Ale with an OG of 1042 would survive the journey better and be more suited to the tropics.

Let's recap:

1. IPA, at around 1060, was an ordinary strength beer
2. it would have been weaker, but for the tax regime
3. its gravity didn't help it survive the voyage

As I'm having trouble getting some people to listen, I'm going to continue shouting at you about the strength of IPA for some time yet.

Whitbread costs 1913 - 1920

Just in case you thought I'd abandoned my old documents for the holiday period, here are some more numbers.

I'm back on the topic of profiteering in WW I. The little notebook full of statistics I found in the archive last time is proving invaluable. It has All the other costs - wages, fuel, etc - missing from my initial calculations. Take a look:


Interestingly, their labour costs didn't increase significantly during the war. I suppose because much of the workforce was in the trenches. The area of biggest change between 1913 and 1922 is pretty obvious: tax. In 1913, tax accounted for a third of the cost of a barrel of beer. By 1920, it was two thirds.

Tax and income

Yesterday I mentioned the catastrophic increase in beer duty in the early 1930's. Today I'm going to give you more details about it.



As you can see, in 1930 41 million barrels of beer were produced. Taxed at 80 shillings (4 pounds) per standard barrel, this brought in the government 71 million quid. Two years later, with tax at 114 shillings per standard barrel, fewer than 18 million barrels brewed and the total revenue collected was down to 67 million pounds.

Realising their mistake, the government dropped duty back to its old level, but it was too late. Beer production remained at around 20 million barrels and government revenues were just 54 million pounds.

There's a lesson in there for governments who greedily eye beer as an easy source of cash.