Britons are warned that hundreds of pubs could go bust if alcohol duty continues to cut into profits.
In a letter to Jeremy Hunt yesterday, those in charge of popular alcohol brands such as Asahi, Budweiser and Greene King have warned that these beloved brands could be brought down if there is no change in the Spring Budget.
By cutting alcohol duty by five percent, the Government could unlock an extra 13,000 jobs.
Up to 750 British pubs could be forced to close by the end of the first half of 2024, according to the British Beer and Pub Association (BBPA).
According to a statement from them, an unlucky combination of stubbornly high energy bills, the third-highest beer duty in Europe, and a lack of VAT relief for hospitality has forced many pubs to close their doors, and could continue to cause problems for vast numbers of UK pubs.
Cutting the tax by five percent could prevent a repeat of 2023, when more than 600 pubs tragically closed down due to soaring bills, red tape and levies.
Cutting beer duty is a central request of the beer and pub industry in the upcoming Budget, along with a cap to the business rates multiplier and a reduction to the VAT charged on non-alcoholic drinks and food served in pubs.
In a letter to the chancellor, beer bosses 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 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.”
Last year more than 500 pubs closed their doors for the final time.
However, BBPA revealed research by Oxford Economics showing that a cut to beer duty of five percent would lead to the creation of up to 13,000 jobs, and stop further pubs from closing down.
Pubs and breweries now face even narrower operating margins, with one in three pounds spent at the pub going in taxes, and 40 percent of breweries’ turnover being tax.
The position for many is unsustainable, which is why setting the optimal fiscal and regulatory framework is critical, says the BBPA.
Tory MP Greg Smith said: “The beer and pub sector delivers both economic and social value to local economies and communities across the country, yet it is one of the highest taxed sectors.
“At this Budget the Chancellor has the opportunity to start redressing this misbalance with a cut to beer duty and a cap to business rates.”
Alun Cairns, Conservative MP and Chair of the All Party Parliamentary Group on beer, added: “It was wonderful to see beer duty frozen once again at the last Autumn Statement, and the introduction of the Brexit Pubs Guarantee means there will always be less tax on a pint at the pub than the supermarket.
“Britain’s pubs and brewers generate so much value for local economies and communities and it is clear that a cut to beer duty at the Spring Budget can be a driver of economic growth and job creation.”
A Treasury spokesperson said: “From April eligible pubs will continue to get 75 percent off their business rates bills, which comes on top of a six-month alcohol duty freeze and our Brexit Pubs Guarantee commitment to keep duty on draught drinks lower than in shops.”
