AlcoholFor Mr Cuilan Loughnane, owner of the smallest brewery in Ireland, yesterday was "the best day" in his working life.

For him, the budget decision to halve the Alcohol Products Tax on microbreweries, will be the difference between success and failure of his business.

The workforce in his Shelta Beer Company consists of one person - himself. The brewer believes the cut, the equivalent of 29 cent per pint, is a lifeline for small operations like his.

"I'm the smallest brewery in the country, there's just myself," he explains. "I did have one other guy but I had to let him go. I found him a job in Sweden, where he is now. But I rang him straight away after the budget, and I asked him to come back. That's what this means for me."

Microbreweries had been lobbying for a change in the excise system, arguing that they have been unable to compete against the marketing clout and scale of the main beer companies. The sector is tiny and accounts for a fraction of the beer sold in Ireland. There are believed to be 11 microbreweries operating in Ireland, and most produce less beer in a week than is sold in a busy city centre pub on a weekend.

In a submission to Government, The Irish Craft Brewers Network sought "a staggered" excise system, where brewers paid tax rates based on their output. Mr Loughnane, a plumber by trade, operates his one-man brewery from the premises of the Messrs Maguire pub on Burgh Quay in Dublin, where he produces an average of 2,500 pints of ale, lager and stout each week.

He has found it "impossible" to compete with major beer brands to get his beer into pubs, and has not been able to afford the normal promotion products, such as beer mats and glasses, that pubs come to expect from a brewer.

While the tax cut is not expected to result in cheaper beer for customers, it will allow microbreweries to invest more in their businesses and maintain prices at current levels.