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HMRC internal manual

Beer Guidance

Small brewery beer: Production under licence

Beer brewed ‘under licence’ can never be small brewery beer. There is no strict definition of production under licence; you must consider the merits of each situation and decide accordingly. The following is a general guide only to what constitutes production under licence.

  • The producer has the right to brew an existing brand of beer, but the name and intellectual property rights are owned by a third party.
  • The production and sale of the beer will be restricted by the terms of the licence, for example, certain container sizes can only be sold to specific geographical areas or customers.
  • When sold, the beer will be the property of the producer and will be sold as their own product (the packaging will usually state that it is ‘brewed under licence’).
  • The brand owner will receive either a premium paid at the time of the licence agreement or a periodic royalty payment based on sales or production volumes.

In practice, brewing under licence usually only involves larger brewers. Please contact Alcohol Policy if you have any doubts over whether beer is produced under licence.