A pub landlord has warned a proposed increase in beer duty would be a ‘kick in the teeth’ for the industry.
It comes as a report released by the Centre for Economics and Business Research (Cebr) warns about the ‘severely damaging’ effects the government’s proposal would have.
Raising prices means people will stop and think before they go out and spend money and will be socialising less and less.Paul Saynor, co-landlord of The Rose in June
It’s believed Chancellor George Osborne will announce in his budget on March 16 a hike in beer duty – charges imposed on beer once its produced which are passed on to pubs and breweries – in line with inflation.
Yet locals have enjoyed a decrease in duty over the last three years and say they would not welcome a potential rise.
Paul Saynor, co-landlord of The Rose in June, in Milton Road, Copnor, Portsmouth, said: ‘It’s a kick in the teeth if they do raise it. We’re already struggling with business rates and the breweries are putting their prices up, which puts more pressure on us.’
Last year, The Rose in June didn’t increase its beer prices, instead choosing to swallow increased costs itself. But Paul warns that should the move go ahead then he’ll have ‘no choice’ but to pass that on to his customers.
He said: ‘Raising prices means people will stop and think before they go out and spend money and will be socialising less and less.’
Currently, the pub and beer industry provides £13bn in tax revenue each year and supports nearly 900,000 jobs.
Pubs are already being squeezed with the introduction of the Living Wage on April 1.
Paul said: ‘Of course I support the Living Wage, but adding beer duty rise as well, it’s a lot of money for a small business.’
Cebr’s report suggests an increase would ‘halt’ by the end of the parliament the momentum gained from three years of tax cuts, and further increases would cause a ‘return to the all-time low in beer sales’ by 2020. The Campaign for Real Ale fears the increase would put pubs in danger of having to let employees go or close.
They want to see a 1p reduction in tax and a freeze over the rest of parliament.
Camra chief executive Tim Page, said: ‘This independent research from Cebr shows that any cut in beer duty is beneficial to both the entire pub and brewing industry and to the wider economy.
‘Without the last three cuts, beer prices would be higher and there would be fewer pubs.
‘A fourth cut would keep the price of a pint down and keep pubs open.
‘If the chancellor goes ahead and increases beer duty, the danger is that we could be placing all the benefits that have been achieved over the last three years at risk.’