Breweries are divided over whether a proposed change to the tax system will achieve its aim of benefitting smaller brewers.

The government plans to overhaul Small Brewers Relief which, following its introduction in 2002, revolutionised the beer industry, inspiring the creation of many new micro-breweries and a now-flourishing craft beer industry.

The Treasury’s proposed changes will lighten the tax burden for some brewers, but those that produce between 2,100 hectolitres (369,000 pints) and 5,000hl a year could see their costs increase.

Nationally there have been claims that up-and-coming craft beer makers will lose out so larger rivals can thrive.

Wishbone Brewery, which was set up in 2015 in Chesham Street, off Dalton Lane, Keighley, is among many small businesses across the UK that benefited from Small Brewers Relief.

Wishbone owner Adrian Chapman said he was “wholly against” the suggested reforms, which he said would discourage small brewers from expanding and could even put some out of business.

He said: “Small Brewers Relief has allowed the likes of us and many other small breweries to start brewing and enter the market with half a chance of making a wage from it.

“It is these small brewers that have been the driving force of innovation and experimentation in recent years to create the wonderfully diverse beer scene we now have in the UK.

“Unlike the very large breweries that are calling for this reform, we small brewers do not benefit from economies of scale. We don’t have massive tied-pub estates to rely on and we don’t make millions in profit each year like they do.”

“We are already in an industry where the downward pressure on price is excessive from the multinational brewers, massive companies with shareholders to please, not to mention the cheapness of beer in supermarkets sold as loss leaders.

“Small brewers find it hard to compete as it is, and in my view the duty reform should be at the opposite end of the scale. An increase at the top end would level the marketplace.”

Tim Dewey, chief executive of Timothy Taylor – maker of the nationally-renowned Landlord ale – said his company would not itself directly benefit from the proposed tax changes, but still supported them.

He said: “Small Brewers Relief was introduced in 2002 and there is no doubt it played a significant role in the UK’s ‘craft beer revolution’ leading to more breweries and helping revitalise the beer category.

“However, after over 15 years in operation without a review, it became clear that there were some issues with the scheme as well.”

Mr Dewey felt there were several problems with Small Brewers Relief as it stood currently.

He said that originally basing the relief on alcohol percentage rather than a cash value was useful to begin with, subsidising lower economies of scale, but had become too generous following other changes to the industry in the past few years.

He said there was currently a 50% duty subsidy for the first 5,000hl produced, then a sudden ‘cliff edge’ tax increase which discouraged successful brewers from producing any more beer each year.

Mr Dewey also believed the 5,000hl cut-off discouraged mergers of small brewers, because their joint output would put them above the figure.

Mr Dewey added: “We were keen to see the 50% duty subsidy limited to a lower volume (2,100hl) but, importantly, a tapering above that level, and above the 5,000hl cliff edge, to encourage successful brewers to grow.

“In addition, while the government was trying to encourage beer exports, export volumes counted towards the 5,000hl total, which strikes us as a disincentive.”