[Note: I have been well chastened by a generous application of the facts by Mr. Stephen Pugh in the comments and now am compelled to consider his objections to the format of the tax subsidy far more seriously. This post has been edited accordingly but done so in a way to ensure continuing admission of my blockheadedness.]
Still with the news out of Britain, it appears Adnams of Suffolk is none too pleased with the recently retired Labour government's tax break for small brewers if this letter by Stephen Pugh, Finance Director of Adnams, to the Financial Times is anything to go by:
The undeniable truth that markets do not always create an optimal outcome was taken by Mr Brown as an excuse to regulate and tinker to an unprecedented extent, often with unforeseen consequences. An example from my own industry is the introduction of "small breweries' relief" in 2002. The taxpayer now provides a small brewer producing around 5,000 hectolitres of beer with an annual duty subsidy of about £170,000 (and even more for those brewing stronger beers). The relief is so highly tailored to the small brewer that those brewing slightly more are likely to be in the position that even if they could brew their beer for nothing, their duty bill would still make them more expensive than a microbrewer.
Southwold, home of Adnam, is in solid Conservative country on the south-east English coast so it may not surprise that they are comfortable speaking out about the end of overt leftist politics (as opposed to the apparent covert leftist politics of the new coalition.) But it is interesting to note the
slagging of concern for small brewers by a medium-sized brewer - especially one which lists it product lines in the following order: wines, kitchenware, beer, gifts. They have hotels, too. At what point are they not really brewers anymore but small to medium conglomerates producing a variety entertainment packages?
If Adnams has passed that point, what is Mr. Pugh really saying? He does make an important point about non-graduated duties but that is not a fault with a subsidy program but one that has too few steps unlike the sensible one we have in Canada. But isn't he really saying that tax relief for small brewers (aka the inversely described "duty subsidy") is unfair to firms that are not small brewers. Like firms that are small to medium conglomerates producing a variety entertainment packages?