Industry leaders have warned that the price of a pint in the UK is set to exceed £5 for the first time due to a combination of cost hikes affecting the pub sector, which are set to take effect next month.
The British Beer and Pub Association (BBPA) has stated that pub operators will be forced to increase prices in order to manage the higher expenses, particularly rising labour costs.
According to research commissioned by the BBPA and Frontier Economics, the average price of a pint is expected to rise by 21p, bringing the typical cost from £4.80 to £5.01. This price increase is linked to a series of cost hikes that will follow the government’s budgetary decisions from last October, which come into effect in April.
Among the cost increases are hikes to the national minimum wage, an increase in national insurance rates, and a lowering of the threshold for national insurance payments. Additionally, business rates discounts for the sector will be reduced from 75% to 40%. The overall financial impact of these changes on the beer and pub sector is estimated to be around £650 million, according to the BBPA.
The move to raise beer prices follows similar steps taken by historic brewer Shepherd Neame, known for ales such as Spitfire and Bishops Finger, which recently announced price hikes due to increased taxes.
Emma McClarkin, Chief Executive of the BBPA, expressed concerns over the looming price increases, emphasizing that many pubs would have no choice but to pass these additional costs onto consumers in order to remain financially viable. “The cumulative impact of these taxes and regulations is now plain to see, and it is highly unfortunate that the only way many pubs can remain viable is to pass on the array of upcoming costs to consumers,” McClarkin stated. She further noted that no one wanted to see the average pint cost rise by 21p, especially as it breaks the £5 barrier.
She added, “It is more urgent than ever that the government looks at ways to cap or reduce the costs of doing business so we can keep pubs open, preserve their community value, and make sure the price of a pint remains affordable for all.”
Tim Black, Associate Director at Frontier Economics, also highlighted the significant challenges facing the beer and pub sector, noting that while the industry had shown resilience during tough times such as the pandemic, the energy crisis, and the cost-of-living squeeze, additional financial pressures were imminent.
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