Mark Daniels: The birth of the £6 pint…

Now, call me a cynic, but what seemed to happen here is that people chatted about the duty, everybody agreed the beer industry is struggling, but then everybody agreed that the government can’t afford to cut duty and so they’ve promised to keep it under review… and isn’t that about it?

You’ve got your petition, well done. We’ve had a chat about it, aren’t we good? And now we’ll carry on as normal.

The reality is that Treasury minister Sajid Javid has stated that the government can’t afford to cut duty and, at the glacial pace these things happen at, a full review is unlikely to happen until about 2014.

Right in time for the next General Election…

I’ve always stated that the duty escalator is a beautifully sly piece of legislation, allowing the Chancellor to increase duty on alcohol every year while saying in his budget speech that he’ll make “no changes to duty”. It’s a crafty piece of wording that never fails to have the consumer thinking everything’s fine and then accusing the publican of being greedy when he puts the price of beer up the following week.

And no doubt, as the 2015 election approaches, every party will use this policy in their manifesto, promising to freeze duty and revoke the escalator if they’re elected in.

During the debate, Midlothian MP David Hamilton put forward the argument that there should be a different tax rate for draught beers compared to pre-packaged products sold in the supermarket. This is a brilliant idea; I’ve written about this before – draught cask and keg products should carry a lower level of tax, served as they are in safe, responsible environments, while pre-packaged products sold in bulk from the off-trade, where responsibility stops as soon as the customer has walked out of the door with his under-priced crate of beer, should carry the premium.

How many late night problems in the high street have been exacerbated by the pre-loading culture generated by supermarket booze?

In 2008 I wrote to Alistair Darling with this suggestion, only to receive a letter back from his department saying it couldn’t be done because the mathematics were too complex for them. If such a tax system was put in place it could even remove the need, and the confusion amongst many, for the minimum-price policy.

Meanwhile, warnings appeared in the press last week that we are just two years away from a £6 pint. Honestly, I’m surprised it’s that far away – I’ve mentioned several times this year that to even have a hope of making the same money I made in 2005, I should be charging more than that now.

With heating oil prices almost 220% higher than they were when I took over the pub and electricity costing me 118% more today than it did in 2005, not to mention the relentless increases in beer duty, petrol, food, wages and so on, the 11% increase in my average price at the pump over the years seems quite paltry.

Like so many of us, though, finding that balance between making enough to survive and charging an amount that won’t scare punters off is a tricky one and we’ll always be too nervous of pushing our beer prices up further than we think we can get away with.

Consumers expect their pint to go up by no more than 10p each year, a tolerance they just about put up with from beer duty rises, but if we try to build in costs to cover the other increases our business absorbs, not to mention the increases in cost from the breweries and suppliers covering their own cost increases, the backlash can be terrifying.

Javid’s point that there are more reasons to pub closures than the beer duty is, of course, true but the escalator is a policy of such heinously devious and unfair proportions that mere platitudes and promises of ongoing reviews are simply not good enough.

Something needs to be done in time for the 2013 budget. Not the 2015 election…