Now we have all spent a day explaining to our customers that beer was not actually reduced in price overnight its a good time to reflect on the detail
I am sure that we all agree that, in monetary terms, a 5% reduction in duty is not even a drop in the ocean but it is good news. It is good news specifically because, for the first time ever, draught beer has been recognised as a segment in its own right.
Far from insignificant
Finally the Government has created a device that is unique to the on-trade and that is a far from insignificant win. While the 5% reduction is no great shakes we now have a segment that this, and any future, Government can apply any number of levers to. I look forward to getting behind next years ‘cut the duty on draught’ campaign.
As an industry we need to push the brewers to pass on the duty cut and not swallow it in general price rises but we also need to educate the public. I, for one, will be displaying a price rise followed by a duty cut whether that be in two separate steps or combined.
Sickly child of high street
We need to show the customer that there was a 20p inflation rise (for example) and then a 3p duty cut so that the net rise was only 17p. The British have always been proponents of gross pricing on tariffs but that does not prevent us demonstrating, clearly, the origins of annual rises and in so doing maintain pressure on the brewers to pass on duty cuts.
While a 50% reduction in business rates is welcome there is no mention of the reform that the system so desperately needs. The system that we have in place now was developed when pubs were the golden child of the high street and it was right for us to shoulder the largest burden.
Pubs are now the sickly child of the high street yet the economy earns far more from every pint sold than it does from the off-trade. Our time of shouldering the burden of business rates has passed and the system needs urgent review.
