Beer Duty / 12 November 2022
Plea from pubs and brewers to help keep the price of a pint affordable this Christmas
Ahead of the Chancellor's Autumn statement on 17 November pubs and brewers are calling for the beer duty freeze to be reinstated as costs continue to rise, beer sales start to slow and more closures loom in communities across the country
As business costs continue to soar and the cost of living bites for consumers, the British Beer and Pub Association has made a final plea in an open letter to the Chancellor, asking him to reconsider a freeze to beer duty to help keep the cost of a pint in the local pub affordable for customers this Christmas.
Highlighting new figures the letter shows the average costs for pubs and brewers were up 22% at the end of this summer compared to 2021, even before colder months started to bite.
Writing to the Chancellor, the Association stresses that soaring prices are forcing businesses to pass on costs to their customers at the bar, with the average price of a pint up 8% on last year.
The letter, sent by the BBPA, representing businesses from regional pub companies to international brewers, highlights the tax as one of a myriad of costs that are driving increased prices for customers and crippling their businesses; with over 50 pubs a month now closing compared to around 30 just 12 months ago.
Highlighting soaring costs across the entire supply chain and ongoing uncertainty about whether they will receive support with unmanageable energy costs beyond March, the letter notes the freeze would help to keep the price of a pint affordable and ensure customers aren't deterred from a trip to their local this festive period, with UK beer sales already down 10% on the same period last year.
The letter also cautions that failing to introduce the beer duty freeze would take the tax to its highest ever historical record at a time of severe pressure for the industry, but reinstating would channel £360million back to pubs and breweries.
Emma McClarkin, Chief Executive of the British Beer and Pub Association said:
"We are caught in an extremely vicious circle, customers are understandably being cautious, but the cost of doing business is out of control and as a result this is set to be the toughest Christmas on memory for UK pubs and brewers. Many just managed to pull through the pandemic, but what we are facing now is crippling businesses at an unprecedented rate. We need the beer duty freeze reinstated to alleviate at least some of the cost pressure on our pubs and brewers and to avoid undermining the crucial Alcohol Duty reform measures to be implemented in 2023.
"The last thing these pubs want to do is put prices up for customers who are struggling themselves with the cost of living, they want to provide a warm and welcoming space for their communities, especially in this acutely difficult time, but without relief from the Government it's difficult to see how many will continue to do so."
Oliver Robinson, Joint Managing Director of Robinsons Brewery, who operate 260 pubs across the North West and North Wales said:
"For months there has been absolutely no let-up in the costs being piled onto our business. We are seeing unprecedented price increases across the business but especially on raw materials and if these were all passed on it would make the cost of a pint almost unaffordable in many pubs.
"News of the beer duty freeze by the former Chancellor provided a ray of hope, but the subsequent U-turn has not helped the mood and we urgently need the Chancellor to reinstate it to provide some let up. Beyond this, there needs to be some parity created, we need a VAT reduction within our sector to make sure it can be allowed to thrive once again, not just survive. We want to be in a position where we are supporting and funding government in a fair way, not one that is unsustainable."
Paul Davies Chief Executive of Carlsberg Marstons Brewing Company said:
"Costs are spiralling across the whole of our supply chain, from the cost of CO2 to malt to bottles, all directly impacted by energy. A cut to beer duty would ease these pressures so we can continue to supply the industry at this difficult time and help keep the cost of a pint affordable for customers.
"If the Government is serious about investing in businesses for growth they need to recognise the value our industry brings not only socially in communities across the UK but economically and deliver a freeze to a tax that is in desperate need of reform."
BBPA calls for urgent inquiry into poor conduct by energy suppliers
The British Beer and Pub Association has today called on Chairs of Treasury and Business Select Committees to conduct an urgent inquiry into worrying reports of poor conduct from energy suppliers The British Beer and Pub Association has today written to Harriett Baldwin MP and Darren Jones MP, Chairs of the Treasury and Business Select Committee respectively, to urge them to convene an immediate inquiry into the energy sector and potential instances of profiteering. Introduced in October, the Government's Energy Bill Relief Scheme was intended to bring down energy costs for millions of businesses but has since had little positive impact for the brewing and pub sector. The trade body is reporting countless examples of price hikes and poor practice which in many cases have meant the impact of Government support is effectively nil, and has led to suspicions of profiteering on the back of taxpayers' money. Reports from publicans and brewers include sharp increases in non-energy costs being layered onto bills, harsh new terms and conditions, requirements for enormous up-front security deposits and even flat out refusing to contract with hospitality businesses at all. The BBPA has written to the energy regulator Ofgem which is investigating the claims, but says there is a need for action immediately to prevent what is already becoming the number one cause of business failure in the sector. The BBPA is calling on MPs in Westminster to demand an explanation from energy suppliers for the current state of the market. It is also essential that the recent reduction in wholesale prices is reflected in energy bills quickly. Gemma Gardener who runs The York in Morecambe said: "Not only have our energy bills been extortionate, but our supplier has also added on extra unexpected charges outside of our standard rates, from a £2k installation fee to doubling our daily hire charge unexpectedly.  "We have tried to switch suppliers but been rejected, and the only reason we're able to keep going is because our pub company is helping us through. We're struggling with our bills but so are our customers and so we're being squeezed at both ends. "Not knowing what we'll be charged month on month is incredibly scary, this isn't only our business but our home and we're at the mercy of our energy suppliers." Emma McClarkin, Chief Executive of the British Beer and Pub Association said: "The spiralling cost of energy has been our members' number one concern for close to a year now and remains so. Now, multiple reports of poor practice have compelled us to speak up on behalf of suffering businesses and make this urgent call. "There is no doubt that this is causing businesses to fail – people simply cannot afford to make ends meet and are left with no choice but to shut up shop meaning a community loses its pub or brewery, and the jobs and livelihoods that go with it, for good. "The Government put this support measure in place to stop this very thing from happening, but the energy suppliers just don't seem to be playing fair. The damage being wrought on our sector is enormous and I hope that MPs will heed this call and investigate the issues fully."
More planning time needed for effective Deposit Return Scheme, says BBPA
Responding to the publication of the Government response to their second Deposit Return Scheme (DRS) consultation, Emma McClarkin, Chief Executive of the British Beer and Pub Association, said: "The delay to the implementation of a DRS in England, Wales, and Northern Ireland until October 2025 at the earliest is a positive move. To ensure a functioning and effective scheme across all UK nations it is crucial that enough planning time is provided, and that learnings are applied from the Scottish DRS, which is due to begin in August this year. With this in mind, we are urging the Government to swiftly appoint a deposit management organisation to ensure businesses are provided with requirement information as early as possible. "With less than eight months until the go live date in Scotland it is imperative that DEFRA, HMT and HMRC provide further information on VAT on deposits as a matter of urgency. Businesses are unable to fully cost and plan for the impact of a DRS without this detail. The complex nature of DRS means the operational challenge is extremely large and it is crucial further information is provided as we move ever nearer to the implementation date in Scotland if the scheme is to operate effectively and efficiently. It is also critical for businesses that operate across the UK that the schemes are interoperable, as entirely separate schemes add unnecessary risks and complications for businesses in Scotland, England, Wales and Northern Ireland."
Breweries and pubs are on the road to Net Zero
Breweries and pubs across the UK have started the New Year with green ambition and are sharing the ways in which they are innovating to make their businesses more sustainable in the run up to World Earth Day In the coming weeks, the British Beer and Pub Association (BBPA) will be sharing how pubs and brewers are making their businesses more sustainable in a selection of stories and examples on a dedicated website, designed to inspire and support others to make green changes to their own businesses. Brewing Green, the dedicated website run by the BBPA, acts as a dedicated knowledge hub for brewers and pubs looking to reduce their environmental impact and the 2023 iteration will launch in April ahead of World Earth Day. From real life examples of initiatives to a carbon calculator developed in partnership with Zero Carbon Forum which helps businesses see their impact and how they can make changes, Brewing Green demonstrates the steps being taken by the sector and provides resources for them to keep moving forward on their journey. From regional companies to international brewers, the examples show that even small changes can make a big difference. For Glaswegian Brewer Tennents, their 'Pint & a Plan' events, held in pubs across Scotland, served as a way for people to find out more about how they're making their business more sustainable and what steps individuals can take to have their own positive impact…all over a pint, of course! Meanwhile, Suffolk based brewer Adnams has managed to reduce water usage across their brewing process through assessing how water flowed across the lifecycle of their products so they could plan in mitigation from the start. They expect to save two million litres of water throughout 2023. Dr Andy Wood, CEO of Adnams said: "We have for decades looked to minimise our impact on the environment whenever we can, we're committed to finding new ways of making a bigger difference. "We have received the Queen's Award for Sustainable Development three times and we will keep working hard at doing what we do without its costing the earth." Over the coming months, the BBPA will be sharing member examples on the Brewing Green site, demonstrating the different ways they are working towards net zero. The release of the stories will culminate in a parliamentary showcase to highlight the economic and social potential of the brewing and pub industry and why the Government must invest in its future. Emma McClarkin, Chief Executive of the British Beer and Pub Association said: "Ours is an industry that is deeply rooted in the history and heritage of this country, but it is also one we want to not just be fit for but thrive in the future. "Brewers and pubs across the country are making great progress on their sustainability goals and are keen to share their ideas so others can do the same. We want to support them to continue in this brilliant and necessary work and help the industry to make the changes needed to reach Net Zero. "Pubs and breweries are deeply rooted in communities across the country and want to have a positive impact on both the people they serve and the environment as a whole, so we're really proud of our members work in this space and will continue to promote and support their efforts in whatever way we can." For more information and to read about how pubs and breweries are becoming more sustainable, visit brewinggreen.org