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Removing barriers to Trade in the USA

On 22/09/15 by Brigid Simmonds (Chief Executive)

BBPA has for some time been engaged with Government on the negotiations known as TTIP (The Transatlantic Trade and Investment Partnership), which is in essence an attempt by both the US and European Governments to break down trade barriers.

Given the UK’s emphasis on exports as a way to achieve economic growth, there is considerable pressure from David Cameron and others in the Cabinet to make progress.

Many of the issues under discussion are behavioural (for example on animal welfare and issues around genetically modified food), but for beer the issue is purely one of tariffs.

This is why I was delighted that last week, Richard Fuller acted as host for a US congressional visit to Fuller’s that we at the BBPA helped to arrange, and he and I explained to the delegation what we are looking for.

British beer exports are third on the list of food and drink exports from the UK and are worth some £630 million per annum. Exports outside the EU have increased by some 24% since 2008.

The problem is this; small brewers in the USA benefit from Small Brewer Relief in the UK – so if you produce less than 60,000 hl and import into the UK you can benefit, under the progressive Beer Duty regime.

This does not work, however, in reverse. A small brewer in the US is defined as producing less than 2 million US barrels. If a brewer meets the criteria, it receives a discount on federal tax for the first 60,000 US barrels, from $18 to $7 dollars a barrel.

This discount is not available to UK or European brewers trying to import into the US. There are other barriers too – UK importers face a three-tier distribution system which imposes additional costs; domestic brewers only require two.

The TTIP issue for brewers was highlighted by the CBI in its report last summer. As a result, the BBPA was approached by the British Embassy in Washington which was arranging a delegation to the UK to come and understand a little more. This included a Congressman, Representative Don Beyer from Virginia’s 8th Congressional District, and a range of policy advisors and other Congressional professionals.

It was a real opportunity for us to explain that what we were looking for and to give support for a Bill which has been put forward in the US Congress, which would give more help to small domestic brewers, but would also cover imported beer.

As you can imagine, it was a lively discussion and ended up with considerable interest in the range of Fuller’s beers and of course the importance of British ‘draft’ beer to overseas markets. Time will tell whether TTIP makes progress, or whether in the meantime Congress will vote to offer help to overseas brewers in the interests of broadening their own market!



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