From a press release received this week, about a beer that has been aged in a Scotch whisky cask: "Please Note: Because the beer has been matured in a whisky cask HM Revenue class the beer as a spirit rather than a beer and insist that we sell the beer at the spirit duty rate rather than as a beer. Neither are we allowed any sediment allowance as the beer is re-classed as a spirit"
I love the plush texture and multi-dimensional flavours that cask-ageing gives to a beer, be it whisky, rum or brandy. In the UK, ageing beers in a wooden barrel that has previously contained spirits is something that is gaining in popularity. There are many reasons that you might want to do such a thing, but most brewers do it in order to give another flavour dimension to the beer. In the same way that malt whisky takes on the character of the sherry that was in the cask before it was re-used, so too does beer take on the character of whatever was last in the cask.
The problem is, in the UK, ageing beers in a wooden barrel that has previously contained spirits is also technically illegal. Her Majesty's Revenue and Customs (the people who enforce legislation relating to border protection, taxes and excise duty) have a strict law that prohibits grogging. But there are two problems is that this piece of legislation.
The first problem is that it refers to a practice that is solely concerned with extracting spirit from barrels, usually by adding water. The concern for HMRC is simply that people are extracting spirits without paying duty on them. Put simply, if you put a gallon of water in an old whisky cask and leave it, after a few months, you'll get dilute spirit out - usually about 10%abv.
The second problem is that this legislation is applied inconsistently. Currently in the UK, there are plenty of people ageing beer in old spirit casks, but they are all being treated differently from an excise duty point of view. The taxation can be anything from straight beer duty (with appropriate reduction under Progressive Beer Duty, if the brewer is small enough), to duty taxation at a full spirits rate, to a flat refusal to allow the brewer to pay tax on the cask-aged beer.
The first problem is pretty straightforward. The legislation needs to be reviewed, and clearly any beers that have their %abv bumped up by a bit of casual grogging should be taxed simply as beers. The beers that undergo such treatment are a tiny fraction of a percent of the beers produced in the UK today. It won't create a wholesale resurgence in grogging, it will just allow brewers another option to add flavour and texture to their beers. Perhaps a percentage increase in %abv might be permitted.
The solution to the second problem follows on from the first. Review of the law will ensure that there is no longer any ambiguity, and so the application of the unambiguous law will not vary between local HMRC officers, as is the case currently in the UK
FOOTNOTE: The brewery in which I took the featured picture has no issue with HMRC, although they did have a long struggle getting their cask-aged beers to market