UK Autumn Budget 2024: How Will It Impact Breweries?

The Autumn Budget 2024 has arrived, and its impact on UK breweries is a mixed barrel of challenges and opportunities. Rising operational costs are a significant concern, with increased National Insurance Contributions (NICs), higher minimum wages, and reduced business rates relief all poised to squeeze margins. Adding to the pressure, inflation-linked increases in alcohol duty on bottled and canned beers will likely push production costs even higher.

However, there are some positive developments for breweries to tap into. A 1p-per-pint reduction in draught duty is welcome news for those serving the on-trade sector. Meanwhile, government incentives for sustainability and skills development could help breweries future-proof their operations and invest in growth. The question now is how breweries can adapt to these changes and emerge stronger.

In this article, we’ll dive deeper into the biggest changes that will impact breweries in the coming years. Please note that we do not offer financial advice - consult with your accountant or tax advisor for a complete understanding of this latest budget.

Key Takeaways

If you haven’t got time for the details, here’s the summary:

Change	Key Details	Impact on Breweries
Employer National Insurance Contributions (NICs)	Employer NIC rate increasing by 1.2pp from 13.8% to 15% (from April 2025), with the threshold reduced to £5,000 per year.	Higher employment costs, especially for breweries with larger workforces.
Alcohol Duty Changes	Draught duty reduced by 1p per pint (from Feb 2025), while non-draught duty rises with RPI inflation.	Reduced costs for draught beer; higher costs for non-draught products, affecting margins.
Business Rates Relief	Hospitality relief drops from 75% to 40% (2025/26), capped at £110,000 per business. Small business multiplier frozen until 2026.	Breweries with taprooms see increased property costs. Production-only sites remain ineligible.
Minimum Wage Increase	Minimum wage increasing, particularly impacting younger workers (18-20 years).	Higher staffing costs for breweries employing younger or part-time workers.

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Autumn Budget 2024: The Big Changes Impacting Breweries

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Employer National Insurance Contributions (NICs)

From April 2025, breweries will face an increase in employer NICs, with rates rising by 1.2 percentage points from 13.8% to 15%. Additionally, the threshold for contributions will drop from £9,100 to £5,000 annually, meaning businesses will pay more even for lower-paid staff.

For breweries, especially those with production teams, taproom staff, or seasonal workers, this will significantly impact employment costs.

To mitigate the strain, breweries should evaluate their staffing and explore ways to optimise workflows. Investing in automation or technology in labour-heavy areas, such as packaging, could help reduce reliance on manual labour. For smaller breweries, accessing the increased Employment Allowance of £10,500 can provide some financial relief.

While these measures might not fully offset the increased costs, they can ease the burden and create space for long-term improvements, such as upskilling employees to boost efficiency.

Higher labour costs may push breweries to adjust pricing, particularly for products with slimmer margins. However, this is also an opportunity to invest in employee retention and training, which can reduce turnover and boost productivity.

By building a skilled, motivated workforce, breweries can offset the rising costs and continue to grow sustainably. With these changes on the horizon, it’s essential for breweries to start planning now to ensure their operations remain resilient and competitive.

Alcohol Duty: A Mixed Picture

The Autumn Budget takes a dual approach to alcohol duty, reflecting the government’s intention to bolster the pub trade.

From February 2025, draught beer will benefit from a 1p-per-pint duty reduction for average-strength products. This move is clearly designed to support on-trade businesses like pubs and bars. For breweries, it’s an opportunity to strengthen relationships with these partners, potentially securing more consistent orders or expanding their presence in this market.

In contrast, non-draught products such as canned and bottled beer will see duty rates increase in line with inflation. This creates a dilemma for breweries that rely heavily on these formats: absorb the rising costs or risk alienating customers with price hikes. Highlighting the craftsmanship and quality behind these products could help justify higher price points, particularly for breweries positioned as premium or artisan brands.

The dual focus of the duty changes underscores the importance of adaptability. Breweries may want to evaluate whether expanding draught production could open new doors in the on-trade sector while maintaining a strong off-trade presence.

Business Rates Relief: Tighter Margins Ahead

From April 2025, hospitality business rates relief will drop from 75% to 40%, capped at £110,000 per business. For breweries with public-facing spaces like taprooms or onsite pubs, this change could mean thousands of pounds in additional costs annually. Production-only facilities, which are excluded from these schemes, continue to bear the brunt of full rates.

Planning ahead is crucial to mitigate these costs. Reviewing property usage and ensuring that all eligible spaces are enrolled in the relief scheme can help breweries maximise savings. Hosting events or sharing underutilised spaces with complementary businesses could further offset the financial impact. Additionally, engaging with local councils and industry bodies could give breweries a voice in consultations on future rates reforms.

The Minimum Wage Challenge

The rise in the National Minimum Wage will increase costs for breweries, particularly those employing younger workers or relying on part-time staff. While this change is part of the government’s strategy to improve living standards, it adds another layer of financial strain for small and medium-sized breweries.

For breweries, maintaining a balance between paying fair wages and ensuring sustainability is key. Retaining valued staff can often be more cost-effective than frequent hiring and retraining. Building a workplace culture that values employees and fosters loyalty can be a strategic advantage during challenging economic times.

Opportunities in Sustainability and Innovation

The Autumn Budget also provides golden opportunities for breweries to embrace sustainability. Enhanced government incentives are encouraging businesses to adopt greener practices, from investing in energy-efficient brewing equipment to using biodegradable packaging and transitioning to renewable energy sources.

By reducing energy and water use or repurposing waste, breweries can lower their long-term operating costs. These efforts resonate strongly with an increasingly eco-conscious consumer base, providing a competitive edge in the market. Beyond cost savings, sustainability aligns with broader government goals, potentially opening up new avenues for support in the future.

Innovation is another area of opportunity. Research and Development (R&D) tax credits remain a powerful tool for breweries to experiment with new recipes, improve processes, or explore sustainable brewing methods. For breweries that invest in growth through innovation, these credits can help protect margins while pushing creative boundaries.

For breweries looking to expand their horizons, the budget’s focus on export initiatives offers a significant boost. With support like market entry guidance and export loans, breweries can explore international opportunities in Europe, Asia, and beyond. The demand for British craft beer continues to grow globally, presenting an exciting avenue for revenue diversification.

Adopting digital tools funded by the government, such as inventory systems and ecommerce platforms, could help breweries streamline operations while reaching new customer bases online. This is especially important for breweries looking to scale their direct-to-consumer operations or break into new export markets.

A Community That Thrives Together

The brewing industry has long been a testament to resilience, creativity, and collaboration. The 1p-per-pint draught duty relief isn’t just a small financial reprieve – it’s a reminder of the government’s support for pubs and independent brewers as pillars of the UK’s cultural fabric. Breweries should seize this as a chance to strengthen ties with the on-trade market, highlighting their value as trusted suppliers.

At the same time, the UK’s off-trade market for craft beer remains strong, with consumers willing to pay a premium for high-quality, locally produced beverages. By emphasising their craftsmanship and investing in sustainable and innovative practices, breweries can navigate rising costs while continuing to appeal to a loyal customer base.

Make the Most of the Budget with Tap’in

As breweries navigate these changes, Tap’in is here to lighten the load. Our logistics solutions are built for breweries, helping you focus on your craft while we handle the rest.

From our optimised warehouse just outside London to our reliable delivery network across the capital and the South East, we offer the logistics support you need to adapt and grow.

With Tap’in, you’ll enjoy:

Flexible storage solutions for kegs, cans and bottles.
Seamless order processing, including picking, packing and dispatching.
A delivery service tailored to London’s unique challenges, supported by our experienced drivers, that really understands and communicates your brand.

The Autumn Budget may bring challenges, but it also opens doors for growth and innovation. Let us help you to make the most of the opportunities and take your brewery to the next level. Get in touch today for a personalised consultation and discover how we can support your success.