Warning pint prices set to soar and pubs shut as Reeves told ‘act now’ | Personal Finance | Finance
Pub chiefs are warning that more pubs will close as Britain faces a pint prices surge without cuts to beer duty and radical reform to business rates.
The British Beer & Pub Association (BBPA) is warning of a crisis in the industry that could see a rise in closures that are already running at 50 every month in England and Wales alone.
Some 80 industry leaders have signed a letter to the Chancellor asking her to take action to reduce the cost of doing business in what will be a make or break budget for pubs and hospitality.
The letter warns that there is “nothing left to give” from the sector which, without meaningful support in the Budget, will see more pubs close.
The duty on a pint of beer is some 49p while VAT accounts for another 80p. Once other business costs are added to the equation the profit made per pint sold is as little at 7p.
And the industry is concerned that other costs are about to be heaped on to pubs and brewers, including a green levy on glass bottles that could mean it is no longer financially viable to sell beer in a traditional bottle.
The letter from industry leaders warns: “Our industry faces a cost of doing business crisis.”
They said that without urgent action “we will see pubs close and the end of the affordable pint. When a pub struggles to survive, it cannot continue to be the beating heart of a community, keep employing staff, or contribute to economic growth.”
The BBPA said that despite recent freezes, UK beer duty remains nearly three times the European average, further compounding the financial struggles of the industry.
Pubs are disproportionately burdened by business rates, paying up to five times more relative to turnover compared to other sectors. The BBPA is advocating for an extension of the current 75 percent business rates relief, which has saved many pubs from permanent closure and a cut in duty.
The letter said: “This is an historic low and the industry simply cannot afford other costs, let alone tax increases. Put plainly, for thousands of pubs and brewers across the country there is nothing left to give.
“Pubs and brewers contribute to the fabric of British life. Beyond their economic role, they are hubs of social cohesion, where communities come together. The Chancellor must recognize this in his upcoming Budget and ensure we do not lose more of these essential businesses.”
The letter to the Chancellor highlights several urgent challenges, including the projected fees associated with the Extended Producer Responsibility scheme, which is the equivalent increase in duty on glass bottles by 7-14 percent.
In addition, the proposed ban on outdoor smoking in pubs, which risks driving customers away, an anticipated rise in the National Living Wage, along with skyrocketing energy bills, all threaten to further erode pub profitability.
“The cumulative impact of these pressures cannot be underestimated. Each government-imposed measure adds to an already overwhelming cost burden, stifling growth and driving pubs out of business,” the BBPA letter explains.
The BBPA is urging the government to freeze beer duty beyond February 2025, cut duty rates over time to align with European averages, and maintain the current business rates relief until comprehensive reforms are implemented.
It said any failure to act could result in widespread pub closures and a loss of local jobs, ultimately harming the very communities pubs have long supported.
The British Beer and Pub Association (BBPA) says the new packaging levy will add 9p to the cost of a 500ml bottle of beer pushing up prices on the shelf and in bars. Brewers say the new levy on the production of glass bottles could make it too expensive to continue selling beer, such as Old Peculiar, in traditional bottles.
The levy regime, which would also add 3p-7p to the cost of producing smaller 330ml bottles, was drawn up by the last Conservative government and has been adopted by Labour.
It forms part of new rules that make product manufacturers responsible for contributing to the cost of handling and recycling packaging. They are designed to discourage wasteful packaging.
Producers will be charged fees under the Extended Producer Responsibility for packaging (pEPR), which is due to come into effect in April next year.
