UK: Britain’s oldest brewer warns of prices hike in its pubs
Britain’s oldest brewer has warned that prices in its pubs are set to go up, due to rising inflation and the cost of living crisis, Yahoo News reported on March 23.
Official figures on March 22 revealed there was a surprise jump in inflation to 10.4% last month following a period when it decreased.
Now Shepherd Neame, which has 303 pubs and hotels in south-east England – predominantly in Kent and London – has said that the pressures of inflation have negated their recent upturn in profits.
As a result, price rises in its bars are expected, the firm said.
Chief executive Jonathan Neame told Kent Online: "I think prices will continue to go up – that's inevitable.”
Neame said that food prices in the company’s establishments had not yet risen, but added: "We will do our level best to keep good value for money and try and keep the pub experience affordable for people, but there is still a significant amount of inflation."
He added that the hospitality sector had been experiencing inflation “significantly more than the headline national inflation” and is still suffering the effects of the pandemic and current cost of living crisis.
He said: "I think we'd have hoped it would have been a shorter crisis and we'd have bounced back fully by now.
“I think the expectation is it will now be 2024/25 before we can hope to recover to where we were.”
Yahoo News UK has contacted Shepherd Neame for a comment.
Shepherd Neame is not the only company that has warned of rising prices amid the cost of living crisis, with some punters already seeing an increase in prices at their local pubs.
Last month, JD Wetherspoon raised its food and drink prices by 7.5% as costs spiralled.
The pub chain insisted its prices remained "very competitive" and that the rise was still below the rate of inflation.
But the change has seen nearly 20p put on the price of a pint and an increase of more than 70p on the price of fish and chips in some of its establishments.
Wetherspoon spokesman Eddie Gershon also blamed rising inflation for the soaring costs in the hospitality sector.
He said: "Most businesses in the hospitality industry have had to deal with big price increases in the past year or two.
"We have tried to keep our prices competitive, bearing in mind that customers have suffered from inflation too."
UKHospitality chief executive Kate Nicholls said that pubs putting up prices, in part because of high energy bills, was driving rising inflation – but added they were only responding to the costs of doing business.
Hospitality is struggling to keep up with public demand as a result of the financial toll it suffered from COVID lockdowns and resultant supply chain issues and labour shortages.
Nicholls said last year: “The hospitality sector continues to battle soaring energy costs, worker shortages and a cost of living crisis dampening consumer confidence, which is threatening the future of thousands of businesses.
“Hospitality businesses add huge value to the cultural and social fabric of local communities and we must avoid a situation where we lose a critical mass of our industry. Once these businesses are gone, they are gone for good.”
UK hospitality businesses also charge 20% VAT – more than double the 9% in Ireland pay, while other European nations, including France, Spain and Greece, also have less VAT.
Chancellor Jeremy Hunt attempted to help the “great British pub” in last week’s spring budget by freezing the duty on draught pints in pubs – part of what he called the “Brexit pubs guarantee”, as it could not be done while the UK was still in the EU.
However, drinkers are still faced with a 10.1% increase in the tax on alcohol from August, following a freeze during the cost of living crisis.
Wetherspoon boss Tim Martin welcomed the duty freeze, saying: “We have been campaigning for tax equality for a long time. This gesture by the government is a tacit acknowledgement that something needs to be done.”
But the measure was not welcomed by all, with Campaign for Pubs vice chair Dawn Hopkins describing it as a “velvet-gloved punch”.
She added: “If the government were serious about supporting pubs and hospitality, they would have… cut VAT and finally announced the long-awaited overhaul to the business rates system they have promised again and again…
“We will lose even more of our nation's pubs and small breweries if this government continues to ignore calls for targeted support.”
24 March, 2023
