Rising costs ‘will wipe out booze price cut’: Budget move slash price of drinks will be swamped by other increases that 30p to a pint, industry experts say
The idea that Britons will make a saving on beer and fizz as a result of changes announced in the Budget have been dismissed by industry leaders.
Chancellor Rishi Sunak boasted of a ‘once in a generation’ reduction in the duty imposed on beer and cider sold on draught in pubs and bars.
It was suggested the reforms would deliver a saving of around 3p a pint and Mr Sunak argued this would provide a lifeline to community pubs.
However, the changes are not due to come into effect until February 2023 and will be swamped by imminent increases in costs that could add 25p-30p to the cost of a pint.
Rishi Sunak followed up his beer duty cut announcement with a trip to a London brewery with the Prime Minister
The brewing and hospitality industries have been hammered during the pandemic with repeated lockdowns. They are now wrestling with punishing increases in costs, such as energy, transport and labour.
The Budget included small print rules that will limit the benefit of the reduction in duty on draught beer and cider to drink sold in kegs and casks containing at least 40 litres.
Most small, craft brewers and the pubs they serve use 30 litre containers, which means they miss out of the reduction.
The changes were a central plank of the Budget and both the teetotal Chancellor and Boris Johnson took park in a publicity stunt to highlight them at the Fourpure Brewing Company, in Bermondsey, London.
Pub face imminent price hikes before the February 2023 reduction in beer duty comes into effect
However, they are now unravelling under the scrutiny of industry leaders. Vice chairman of the Campaign for Pubs, Dawn Hopkins, the owner of the Rose Inn, Norwich, said: ‘There’s no way this will lead to a change in prices across the bar.
‘Prices are soaring and these changes won’t come in until 2023 anyway. It also discriminates against craft beer breweries by excluding smaller kegs.’ Director of the campaign, Gary Murphy, said it is ‘highly unlikely’ that the price of a pint will fall.
‘The idea that we’re going to get pints 3p cheaper is frankly ludicrous. The challenges are far greater than the crumbs that are being offered,’ he said. Jonathan Neame, chief executive of Shepherd Neame, said the company would pass on the 3p-a-pint duty cut on kegs it sells wholesale to landlords, but drinkers are unlikely to see the benefit.
The cut was one of the most talked-about parts of Wednesday’s Budget delivered by the Chancellor
He told Radio 4’s Today programme: ‘In all honesty, pubs are facing between 25 to 30p per pint inflation and all this will do will take the top off that.’
The Chancellor also promised to abolish a super tax that applies to sparkling wine, prosecco and champagne in a reform that will see tax based on alcohol strength.
In theory, this could reduce the price by around 53p a bottle, but again this is likely to be swamped by big increases in the cost of wine production, imports and hospitality industry costs. The Government insists the reform of alcohol duties based on strength will deliver real reductions.