Drinks prices to rise 15% to 20%

The price of alcoholic drinks is to rise by between 15% and 20% due to surging input costs - before any duty rises are factored in.

That is the warning from British Beer & Pub Association (BBPA) chief executive Rob Hayward, who told the Business in Sport & Leisure conference that those who want tax hikes will see the cost of alcohol increase anyway.

The dire prediction comes as brewers tell MPs that they are facing the "perfect storm"​ - because of high beer duty and rising raw material costs - and issue an impassioned plea to freeze beer tax.

Soaring raw material costs​

Hayward said: "Alcohol prices are set to increase by 15% to 20% - I have met producers and they are saying the same thing."​

He told the MA that raw materials - including malt, aluminium, oil and electricity - had all increased by at least 60% over the past 12 to 24 months, and the increases will hit all types of drink.

Alcohol prices are set to increase by 15% to 20% - I have met producers and they are saying the same thing​Rob HaywardBBPA

At a meeting in Westminster on Monday, MPs from the All-Party Parliamentary Beer Group said they would try to meet Treasury minister Angela Eagle to argue for a beer tax freeze at next year's Budget.

Trade chiefs told the meeting that beer has received a raw deal on tax for the past 10 years. During this time, beer duty has risen 27% and consumption fallen 11%, while spirit tax has gone up 3%, with consumption rising by 20%.

Society of Independent Brewers (SIBA) president Keith Bott pointed to massive rises in raw material costs. For example, a tonne of malt is to increase by £135 next year.

Perfect storm​

"We genuinely believe we are now facing the perfect storm,"​ he said. "These increases will appear at the pump in pubs."​

Bott added: "Higher duty rates will increase the price gap between pubs and supermarkets and will increase irresponsible drinking."​

Shepherd Neame chief executive Jonathan Neame said excise duty on beer had reached "revenue maximisation"​, with duty paid on beer over the past three years being £250m below expectation.

"Any increases in beer duty will not raise more money. In fact it will raise less as the market declines. The industry has nothing left to give."​

Paul Hegarty, head of communications at Coors, highlighted how increasing beer tax had hit profits.

"We are calling for cider duty and beer duty to be brought into line to allow us to have a level playing field,"​ he said.