‘Pubs could close’ without alcohol duty cut

A warning has been fired at Chancellor of the Exchequer Jeremy Hunt that many more pubs could close unless he cuts alcohol duty in the forthcoming Budget in March.

The comments were made in a letter to Hunt from breweries including Asahi, Budweiser and Greene King, who want a 5% cut in duty in order to help save their beer brands and help publicans.

According to the British Beer and Pub Association, as many as 750 pubs could close by the end of the first half of 2024, if no action is taken by HM Treasury to relieve ever-rising costs.

In 2023, more than 500 pubs closed, and the sector is now keen to cut duty on beer and other alcohol, alongside a reduction in VAT on non-alcoholic drinks and food, as well as capping the business rates multiplier.

Blind eye

In the letter to Hunt, they said: “No government should turn a blind eye to the erosion of such an integral economic and cultural asset.

“By underpinning a successful and thriving beer and pub sector, we will provide you the short cut to achieving genuine Levelling Up in every corner of the country.

The group also highlighted that high energy bills, the third-highest beer duty in Europe, and no VAT relief for the on-trade was putting pressure on UK pubs and forcing closures.

“The Spring Budget could help ensure that the Great British beer and pub sector can help contribute to wider growth and prosperity for the local high street and the wider national economy”, they said.

WSTA

It comes as the WSTA has also put forward a collection of Budget asks to the Treasury, as the alcohol industry grapples with its biggest shift in duty in more than half-a-century.

The trade body is calling on Chancellor of the Exchequer to announce a duty cut in alcohol following last year’s reclassification based on ABV and changes in duty which has resulted in the UK having some of the world’s highest wine and spirit duty rates.

As a result of the move to higher rates, the WSTA said this month’s surprise rise in inflation to 4% was due to an increase in tax on alcohol, as well as less revenue for the Treasury from falling sales — a scenario the association had warned could occur.

In response to those figures, chief executive of the WSTA, Miles Beale, highlighted how alcohol inflation was three times the rate of a year ago and said “if the government is serious about taking measures to cut inflation the simple answer is to cut alcohol excise duty at the next Budget.”

In January last year alcohol inflation was 3.5%. But it’s now almost trebled, with spirits at 8.9%, wine at 7.8% and fortified wine sitting at 18.7%.