Licensees fear a Budget duty blow

Leading licensees are not holding out hope for a duty reprieve in next week's Budget, despite pleas from the trade to abandon the duty escalator.

Licensees told the Morning Advertiser​ the duty rise — set to be 2% above the Consumer Price Index (5%) — could add up to 10p on a pint and is the third increase of the year following a VAT hike and brewery price rises.

"Sadly, I think it will be 7%," said Chris Gerard of Innventure. "The health lobby is so powerful and it is an easy route for Government to say the increases are for health reasons."

Paul Wigham, of Orange Sun Bars, agreed. He said: "There is not a chance in hell of the duty being lowered."

Butcombe Brewery owner Guy Newell said: "I'm expecting it to be the full amount. I'd love to think that it might be lower, but I haven't seen anything to make me think so."

Bravo Inns MD Ken Buckley added: "If ever an industry was needing some relief, it is now for the pub trade. We have absorbed the 2.5% rise in VAT, but we can't avoid the duty escalator. In our case, it will mean raising prices by up to 10p a pint."

Wigham estimated the rise could be 4.2p on a pint of 5% ABV beer. "It has been a very tough year so far, the rise in VAT, brewers' increases and now duty has meant an average pint will have risen by 20p to 25p between 1 December and 1 April."

Newell said Butcombe will pass on all the price rises to its customers, which he said would equate to 5p per pint.

Higher duty​

It has been mooted that super-strength beers and ciders, those above 7.5% ABV, would be subjected to a higher duty, while drinks below 2.8% ABV would receive slight relief.

Newell labelled the idea as "complete rubbish".

All four operators feared the duty rises would create an even wider disparity between on-trade prices and those in the off-trade.

Buckley said: "The Government should recognise that we have a product, the great British pub, which is exported around the world, and it should give support to small businesses."