E-Malt.com News article: UK: Beer tax means pubs have lost 50pc of sales to supermarkets, says Wetherspoons boss

Pubs have lost half their beer sales to supermarkets because “perverse” taxes have driven up the price of a pint, the boss of JD Wetherspoon has said.

Sir Tim Martin, the founder and chairman of the chain, said harsher taxes were to blame for the growing price gap between pubs and supermarkets, which he said “may well be the straw that breaks the industry’s back”.

It comes as the Chancellor scrambles to hash out a support package for pubs, following a Telegraph campaign to save the industry from ruinous taxes and red tape.

Publicans have hit out at Rachel Reeves’s overhaul of business rates, saying it is pushing them to the brink as they also battle soaring energy prices and staff costs, which have risen after the Chancellor’s National Insurance raid and a string of minimum wage rises.

Venues are also bracing for a further hit from Labour’s plans to cut the drink-driving limit.

Sir Tim said: “Pubs have lost 50pc of beer sales to supermarkets since the millennium, as the supermarket tax advantage has allowed them to widen the price disparity with pubs – by reducing their prices.

“A fairer business rates regime is vital, but VAT equality is even more important.”

Pubs are liable to pay 20pc VAT on food sales, while supermarkets do not have to pay anything, which critics say enables retailers to lower their prices. Sir Tim has previously described the tax disparity as “perverse” and blamed it for beer sales in pubs more than halving between 2000 and 2023, according to Morgan Stanley figures.

The average price of a can of lager in a supermarket has increased by 15pc to 77p since records began in 2018, official data show. By comparison, the price of a pint in a pub has surged at more than double that rate, increasing by 33pc to £4.83.

Lower supermarket prices are encouraging more drinkers to stay at home.

A report by the Institute of Alcohol Studies (IAS) and the University of Sheffield found that shop‑bought alcohol volumes jumped by about 24pc during Covid, and remained high in the following years, while consumption in pubs and bars remained subdued.

Figures compiled by the IAS show that the affordability gap between shop-bought alcohol and pints in pubs has widened significantly over the last two decades, as higher costs are passed on to consumers.

Katherine Severi, of the IAS, said pint prices were higher than supermarket beer because pubs employ more staff, pay higher energy bills, and carry a heavier burden from business rates. She said this enabled supermarkets to “use cheap booze as a loss leader”.

Ms Severi added: “When we’ve surveyed pub owners, they consistently say ultra-cheap supermarket alcohol is the biggest threat to their business.

“It’s also pushed more drinking into the home, which is linked to rising rates of chronic alcohol harm, including liver disease, cancers and heart disease. There are cultural reasons to support pubs – but public health reasons too.”

MPs and pubs have said any rescue package for the industry must also include action on VAT.

Daisy Cooper, the deputy Liberal Democrat leader, said: “Pubs are the beating heart of our high streets, but they are on the brink of extinction – now is not the time for half measures.

“This is why the Chancellor must listen to the Liberal Democrats’ repeated calls to slash business rates by the maximum amount and deliver an emergency VAT cut for hospitality.”

Publicans have also demanded a reduction in employer National Insurance contributions and a freeze on beer duty to reduce costs being passed on to customers.

On January 9, the Prime Minister’s spokesman said: “We hugely value the role pubs play in our communities. We want to protect them.

“Most businesses will benefit from the £4.3bn of support for the next three years. Increases are capped at just 15pc and £800 for the smallest properties.

The Treasury was approached for comment.


09 January, 2026