Budget Day usually causes a little angst for the beer industry. Always fearful that the ‘old reliables’ would be hit, brewers and drinkers alike expect bad news. Recent budgets have eased this worry, somewhat. The only tax increase in Budget 2017 involved a pack of cigarettes going up by 50 cent.

Excise on alcohol is too high by European standards. Yet, it remains stagnant. This became a common theme throughout Budget 2017. It acknowledged a lot of problems but did little to solve them. This budget is very much the product of political circumstance than economic necessity.

Token but limited gestures were the order of the day. Minor cuts to the Universal Social Charge will do nothing for consumer spending. Issues around housing affordability and availability in large urban areas will continue to take an ever increasing slice of wages, hitting discretionary spending more and more. A ‘sugar’ tax appears to be on the way but it’s not expected until April 2018 by the earliest. Well, not until Britain introduces one first.

Of course there was acknowledgement by the Minister for Finance, Michael Noonan TD of the “real risk to the economy”, namely Brexit. Government judged it “prudent” to retain 9% VAT rate to continue to attract British visitors. More needs to be done to protect exports in light of this. Irish breweries have been increasing their sales in the UK but the strong Euro will only see prices rise in the British market. Sterling has lost 23% of its value against the Euro since the Brexit vote. The question is will we see more beers from Northern Ireland and across the Irish Sea making a big push here?

Another big disappointment for brewers came in the lack of positive changes for entrepreneurs. Yes, tax equalisation for the self-employed with PAYE workers by 2018 is well on the way with the credit being increased from €550 to €950. In addition, the 20% capital gains tax was reduced to 10% on disposal of assists up to €1m in chargeable gains. This would only come into play if craft brewers wanted to sell up. However, this is nowhere near comparable with the scheme in the UK where it’s ten times the Irish limit.

Talking of UK start-up schemes, Government gave a commitment to introduce a share ownership scheme in the next budget. This had been called for over the past number of years and the lack of progress has been contentious. Employee share ownership schemes have been a feature of brewing in the US, particularly for attracting and retaining staff, especially brewers. There’s a scheme in the UK so why does it take so long to introduce one in Ireland? There are a number of breweries likely to look at this scheme when it commences.

For craft beer, in particular, there was change to the excise duty relief. This had been flagged by Michael Creed TD, Minister for Agriculture, Food and the Marine over the past month. The qualifying limit for excise duty relief was increased by a third to 40,000 hectolitres.

The special relief reducing the standard rate of Alcohol Products Tax by 50% on beers produced in microbreweries which produce not more than 30,000 hectolitres per annum is being extended to apply to microbreweries which produce not more than 40,000 hectolitres per annum – Budget 2017

There are only a few breweries close to the 30,000 hectolitre threshold. You could probably count them on one hand and still have a couple of fingers left over. This increase may be symbolic and tokenistic. It is likely to have little impact on the sector, particularly in the short-term. Yet, it’s the third year in a row that the excise relief scheme has featured in the budget. It is official recognition by Government that the sector is growing and is an important part of our manufacturing base.

It’s not all about tax, however. Government could do much more to support craft beer in Ireland. It could tackle the issue of on/off sales on brewery premises by introducing special tap-room licences. Local authorities could look at removing planning and commercial rates restrictions to encourage manufacturing in their respective areas. They could also develop local food and drink marketing campaigns and festivals. Bord Bia could roll-out a specific craft beer marketing strategy to unlock export markets and identify mechanisms to allow Irish breweries to exploit them. Fáilte Ireland could assist in developing food trails that feature craft beer. These are just some ideas but no doubt there’s countless more out there.