A Treasury overhaul of the way breweries are taxed has come under under fire, amid claims that up-and-coming craft beer makers will lose out so larger rivals can thrive. Planned changes to the small brewers relief, a system of tax breaks for fledgling brewers that helped fuel the UK’s post-millennium craft beer revolution, have opened up a schism within the beer industry. While the tweaks will lighten the tax burden for some brewers, more than 150 that produce between 2,100 hectolitres (369,000 pints) and 5,000hl a year will see their costs increase. Christian Townsley, the co-founder of the Leeds-based North Brewing, said: “This is a big blow to the industry and will see breweries go under and job losses occur.” “All we know is that we’re going to pay more,” said Mark Tranter, the founder of Burning Sky, near Firle in East Sussex. “It’s not good to drop a bombshell like this, at a time like this, with no clarity about how it’s going to work. “They [the Treasury] are creating more worry for people who were worried already.” A group of brewers who stand to gain from the reforms, under the banner of the Small Brewers Duty Relief Coalition, said the changes unveiled by the Treasury this week were a “very important step in saving the British pint as we know it”. The group, whose members include Theakston in North Yorkshire, Hogs Back in Surrey and Timothy Taylor in West Yorkshire, has argued that that the existing system acts as a disincentive to increase production above 5,000hl. This is the threshold at which duty relief falls away rapidly, restricting the profitability of firms that exceed the watermark, unless they expand much further. But Townsley said this could have been addressed by tapering the duty relief more gradually above the threshold, rather than cutting it for the smallest firms. Multiple brewers that would not be negatively impacted by the change, such as Oakham Ales in Peterborough and Signature Brew in Walthamstow, east London, have come out in support of smaller brewers. Tom Bott, the head brewer at Signature, dismissed the idea that the existing system acts as a drag on growth, pointing out that he had grown production above the 5,000hl mark but still opposed the changes. He said brewers above the threshold already stood to benefit from other advantages thanks to economies of scale. “The regional brewers calling for these changes are trying to pull up the drawbridge behind them,” he said. “They owe a debt to those smaller firms because they’re demonstrating how to progress beer in a way the bigger brewers haven’t done. “This is even more damaging to a brewers coming out of the coronavirus and has potentially huge damaging ramifications for the industry.” The small brewers’ trade body Siba said it was “hugely disappointed” by the chancellor’s decision but the tax changes were welcomed by the British Beer & Pubs Association, illustrating deep division over the policy within the industry. Some beer pundits and professionals have criticised brewers that backed the overhaul or vowed to boycott them altogether. A Treasury spokesperson said: “We invest over £65m per year in craft brewing through small brewers relief. We’ve consulted with hundreds of breweries who have told us that the relief was being withdrawn too quickly, and therefore preventing their businesses from growing. “To support these small breweries, our proposals will mean that they’ll still benefit from the relief as they gradually expand their businesses, rather than having an all or nothing approach where it’s rapidly withdrawn above a certain level.” The department is due to begin a consultation on the proposed changes in autumn.