UK: Beer industry leaders warn against increasing duty as beer prices see 3.8% increase

UK beer industry leaders have warned an increase in alcohol duty in the upcoming Budget would be a “bitter blow” for the sector as beer prices see a 3.8% increase, The Morning Advertiser reported on September 26.

The average cost of a pint of draught lager in pubs saw a 3.8% uptick in the year to August 2024, up from £4.62 in August 2023 to £4.80, the latest figures from the Office for National Statistics (ONS) revealed.

However, this was the lowest year-on-year increase so far this year. The largest was in January, when costs soared by 10.8%.

Draught bitter prices also increased at its lowest rate during this period, rising from £3.84 in August 2023 to £3.92 in August 2024, a 2% upswing.

Earlier this week, it was revealed Chancellor Rachel Reeves had not ruled out putting up tax on beer, wine and spirits as part her first Budget next month.

Though voices from across the brewing and pub industry have cautioned Reeves against the decision ahead of the fiscal address, set to take place on Wednesday 30 October.

British Beer & Pub Association (BBPA) CEO Emma McClarkin said: “A hike in beer duty would be a bitter blow for our nation’s brewers, pubs and beer drinkers.

“After the Chancellor’s pre-election promise of a Five Point Plan for Pubs, it is impossible to see how this will be fulfilled if the price of a pint is increased by the Government.”

Lager prices have jumped 29.3% since pre-pandemic levels and 42.4% in the past ten years, according to data from ONS, while draught bitter prices have risen 26.8% since 2019 and 33.3% in the past decade.

On a quarterly basis, lager costs jumped 0.5% during the first quarter of 2024 and 0.4% over the second quarter, according to the official figures.

McClarkin added: “The cost of doing business has soared in recent years and, with potentially new punishing burdens, this tax increase is the last thing pubs and beer drinkers need. It makes it even more vital the Chancellor maintains the 75% business rates relief.

“Anything less will be a total betrayal of the great British pub that this Government promised to protect, and the 1m jobs that depend on them.”

Last week, the BBPA called for a 5% duty cut in next month’s Budget after data from 2024 Oxford Economic revealed pubs make just 12p on a pint of beer after costs and taxes have been deducted.

In addition, operators from across the sector recently told The Morning Advertiser (MA) pubs were “taxed to death”.

The Campaign for Real Ale (CAMRA) chairman Ash Corbett-Collins said: “Pubs are at the centre of communities across the UK and provide the best environment for moderate alcohol consumption in a social setting.

“Hiking beer tax in the autumn Budget – at a time when pubs and brewers have battled against the odds to survive – is not the answer for healthy pubs or communities.

“The Chancellor should be looking at cutting tax on draught beer and reforming the grossly unfair business rates system to give a fair deal to pubs.”

26 September, 2024