The British Beer & Pub Association (BBPA) warned the industry needs Government support to tackle “soaring” costs in order to continue contributing to the economy.
According to new research from the industry body, the hospitality sector has poured more than £34.4bn in Gross Value Added (GVA) into the UK economy and paid more than £17.4bn in tax in the past year.
In addition, latest figures from 2024 Oxford Economics research showed GVA contributions were up from £26.2bn.
Burdens and restrictions
The data demonstrated the sector’s “important economic contribution on a national and regional level”, the BBPA said, adding pubs make an average of just 12p on every pint of beer once taxes and costs have been deducted.
Moreover, the most recent figures from the Office for National Statistics (ONS) revealed the cost of a pint of draught in pubs had seen a 4.5% uptick in the year to July 2024, from £4.58 last year to £4.79. Bitter costs increased by 2.6% during this time.
In addition, beer prices jumped 0.4% overall during the second quarter of the year, between April and June, compared with 0.5% during the first three months of 2024.
Not only that, but the industry is also facing “multiple burdens and restrictions” in the form of proposed packaging costs and a potential beer garden smoking ban, the trade body further cautioned.
It added the industry is one for the “most heavily taxed” business sectors per pound of turnover in the UK with tax making up 40% of UK brewing turnover and £1 in every £3 spent in pubs.
Economic bellwether
To unshackle the sector, the BBPA has called for a cut in beer duty, business rates reform, and a pledge to keep the 75% business rates relief to ensure that pubs can survive ahead of the upcoming Autumn Budget, set to take place on Wednesday 30 October.
BBPA chief executive Emma McClarkin said: “Our sector’s growth will underpin economic growth, which is why if the Government truly is business-friendly, it must recognise pubs and brewers are shouldering multiple taxes and costs that are squashing growth and could lead to businesses failing.
“There is no more meat on the bone to cut, which is why it we are calling on the Government reduces the cost of doing business so we can continue to make a massive contribution to the public purse.
“Our industry is an economic bellwether and when pubs and brewers suffer, the economy suffers. If the Government wants to succeed in its growth mission, it needs to support our beer and pubs which play such a vital role in our communities.”
