Growth on tap: what widening Draught Relief could mean for pubs and brewers

Cebr’s latest research for the Society of Independent Brewers and Associates explores the potential growth, employment, and tax implications of a deeper cut to draught beer duty

A pint at the local pub remains one of Britain’s most enduring social rituals, but rising costs have put pressure on the pubs and breweries that keep it alive. Over the summer, Cebr was commissioned by the Society of Independent Brewers and Associates (SIBA) to estimate what a deepening of the Draught Relief could mean for economic activity across the sector. SIBA has used these findings as part of its ongoing engagement with policymakers, making the economic case on behalf of the brewers it represents.

What is Draught Relief

Draught Relief means under-8.5% ABV alcoholic drinks, including beer, sold on draught in pubs are subject to a lower rate of alcohol duty than the same drink sold in bottles or cans in shops. It was introduced in August 2023 to support pubs and the wider on-trade, which compete against cheaper alcohol sold for consumption at home. The Relief is intended to help narrow the price gap between a pint at the pub and the same drink bought to take home.

The Relief has been widened once since its introduction: as of February 2025, draught beer carries a duty rate 13.9% lower than non-draught beer, up from an initial gap of 9.2%.

Deepening the Relief further

Our study modelled different scenarios that would widen this gap further still, from its current 13.9% level to 30% and 50%. To put this in context, widening the differential to 50% would take the draught duty rate to £11.29 per litre of pure alcohol, half of the standard, non-draught rate of £22.58.

The economic logic is that as some of the lower costs get passed on to consumers, this elicits a positive consumption response, driving higher volumes and increasing employment and value added throughout the supply chain, benefiting on-trade venues and beer producers alike.

On the consumer side, a lower duty rate translates into a direct reduction, or smaller increase, in the price of a routine household purchase. A lower draught rate makes a pub visit more affordable, contributing to local economic and social vitality.

More beer, more jobs, more value added

Using our model of the UK beer industry, we estimate the impact across on-trade and brewing under each scenario. Expanding the Relief to 30% would generate an additional £137 million in GVA – £92 million from on-trade and £45 million from brewing – alongside over 3,400 full-time equivalent (FTE) jobs and 25 million more pints consumed. A 50% differential could mean up to £310 million in additional GVA (£207 million on-trade, £103 million brewing), over 7,600 FTE jobs, and 56 million more pints consumed, illustrating the potential economic activity that could be unlocked.

Weighing the fiscal cost

While benefiting consumers and companies, a deeper Draught Relief would represent a revenue loss for the Exchequer. However, this would be partially offset by additional VAT, corporation tax, income tax, and National Insurance contributions generated by the resulting uplift in economic activity.

Netting the two together, we estimate the true cost to the Treasury at £140 million for the 30% scenario and £320 million at 50% – a smaller bill than the gross duty foregone, and one that comes with a tangible economic dividend attached. Interestingly, for the 30% scenario, the additional GVA generated (£137 million) is of a similar magnitude to the fiscal cost, with this additional GVA also only taking into account first-order economic effects in two of the specific sectors that would benefit from additional sales.

For more information contact Senior Economist, Otto Jukko (ojukko@cebr.com)