For centuries, the tax on beer has formed a considerable part of its price. And, conversely, the tax on beer has been a vital source of revenue for the government. This was even more the case during the first half of the twentieth century, with two expensive World Wars that needed to be paid for.
“More efficient methods - the brewing industry invests from £8m. to £10m. a year in new plant, buildings, and vehicles, roughly a tenth of its net output — have kept the rise in the cost of making beer to below the rise in the prices of its main constituents and below the rise of prices in general. But prices of beer do not fully reflect this because of the great increase in excise duty, which averaged just over 2d. a pint before the war and now averages about 8d. In the cheapest mild (1s. 2d. a pint now. compared with 4d. until almost the eve of war in 1939) the duty represents almost half the price. According to the Census of Production, in 1951 it represented nearly two-thirds of the value of beer when dispatched from the brewery. The duty is based on the gravity of the malt extract before it is fermented.”
"Beer in Britain", 1960, pages 5 - 6.
Consolidation was responsible for some of the fall in the cost of production. We’ve already seen how average output per brewery rose by around 50% during the 1950’s.
Want to see if they’ve got their numbers right on the tax per pint? I have the odd number or two:
|Beer tax 1939 - 1960|
|Year||Bulk Barrels||Std. Barrels||Tax/Std. Brl||Total Tax £||Tax/Bulk Brl.||Av. sg||tax pint|
|1940||25,366,782||18,738,619||80s / 104s||75,157,022||59s 3d||1040.6||2.47d|
|1940||104s /135s / 165s|
|1941||26,203,803||18,351,113||135s / 165s||133,450,205||101s 10d||1038.5||4.24d|
|1942||29,860,798||19,294,605||165s /240s 7.5d||157,254,430||105s 4d||1035.5||4.39d|
|1943||29,296,672||18,293,919||240s 7.5d / 281s 10.5d||209,584,343||143s 1d||1034.3||5.96d|
|1944||30,478,289||19,193,773||281s 10.5d / 286s 5.5d||263,170,703||172s 8d||1034.6||7.20d|
|1946||32,650,200||20,612,225||286s 5.5d||295,305,369||180s 11d||1034.7||7.54d|
|1947||29,261,398||17,343,690||286s 5.5d||250,350,829||171s 1d||1032.6||7.13d|
|1948||30,408,634||18,061,390||325s 5d||264,112,043||173s 9d||1032.7||7.24d|
|1949||26,990,144||16,409,937||364s 4.5d / 343s 4.5d||294,678,035||218s 4d||1033.4||9.10d|
|1950||26,513,997||16,337,315||343s 4.5d||263,088,673||198s 5d||1033.9||8.27d|
|1960||26,115,012||17,688,007||277s 5d||206,221,271||157s 11d||1037.3||6.58d|
|1955 Brewers' Almanack|
|1971 Brewers' Almanack|
|Brewers' Society Statistical Handbook 1988, p.7|
|Brewers' Society Statistical Handbook 1973, p.11|
You can see that the tax did, indeed, come to about 8d per pint. Though this is for a beer of average strength, around 1037º. Ordinary Mild was around 1030-1032º and the tax on it would have been a little less.
Average tax per pint was 2d in 1939. But the cheapest 4d Milds had an OG well below the average of 1041º, usually around 1027º. The tax on a beer of that strength was 1.67d, still a considerable percentage of the retail price.
The rate of tax was remarkably stable: 321s from 1951 to 1959. And then something really unusual happened. Tax fell by almost 2d per pint.
“The scale of tax—which contributed £260m. to the Exchequer last year—is such that the tax rises steeply as beer is made stronger. Some brewers complain that this discourages the sale of the belter beers. But it is likely that the better beers nevertheless usually get a larger percentage of profit, and people do not seem as sensitive about their prices as they are about the price of the successor to the 4d. mild. If the tax is in its form and perhaps in its weight anomalous, it does not dismay the brewers or daunt the enterprise and initiative of this vigorous industry with its 3,000 brands of mild and bitter, pale ale and brown ale, lager, stout and stingo.”
"Beer in Britain", 1960, page 6.
A word of explanation. Tax was levied per standard barrel. A standard barrel being 36 gallons of beer with an OG of 1055º. Stronger or weaker beers were taxed in proportion to that, so one of 1100º would be double the standard barrel rate, while one of 1027.5º would pay half. It makes strong beers expensive to brew, as the article says. Though before WW I, when the same tax system was in place, there were lots of strong beer about.
More about beer and money next.