Pubco shares slide in wake of Budget
Shares in a number of listed pub operators and brewers took a hammering today as the cost implications of yesterday's Budget began filtering through.
While shares barely reacted in the hours following yesterday's announcement, subsequent media coverage of Alistair Darling's first Budget as Chancellor appears to have hit sentiment hard.
Shares in managed pubco JD Wetherspoon had seen the largest fall, down 3.8 per cent to 260.25p. Midlands brewer Marston's was close behind, with its shares down 3.3 per cent at 214p.
Other companies, including Punch Taverns and Enterprise Inns, saw similar falls today.
The FTSE100 index, which tracks the 100 largest listed companies in the UK, was down nearly two per cent.
Pub stocks were not the only stock market losers, with other listed consumer-facing businesses including hotel and restaurant groups suffering at the hands of nervous investors.
How brewers and pub operators respond to the issue of how to cope with the 4p increase in duty on a pint of beer - along with above inflation increases on wines and spirits - will prove crucial in the coming weeks.
"The pricing issue is key," said City analyst James Ainley of JP Morgan.
"Normally pubs would be able to stick this on the price of pint at the bar. But given consumer spending at the moment that could prove really difficult."
A number of brewers thepublican.com spoke to in the immediate aftermath of the Budget said they would be looking at whether they would absorb or pass on the 4p a pint increase.
