Budget beer tax hit could harm Northampton pub trade

Pubs in Northampton could take a fresh hit if beer duty is raised as expected this week, Britain's Beer Alliance has warned.

Monday, 15th October 2018, 9:54 am
Updated Monday, 15th October 2018, 11:00 am

Tax on beer is expected to rise by 3.4% in the Chancellor’s Autumn Budget, delivered later this month.

But with consumers increasingly opting for cheaper supermarket drinks and pub margins stretched, pubs are bracing themselves for further struggles.

Northampton’s 115 pubs and bars employ about 1,473 people, paying them £12 million in wages, new analysis from Oxford Economics shows.

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They also support another 557 jobs and £11 million in wages indirectly, either through related jobs, like those in the supply chain, or through the money spent by people working in the pub industry.

In total, through salaries and spending power, the area’s pubs contribute £46 million to the local and national economy.

Across the UK, 3.2 pubs have closed on average every day in the last two years. If that trend continues, Britain’s Beer Alliance, an umbrella organisation for major brewers and pub companies, says one in ten pubs nationwide could close within five years.

It would mean a significant loss to the estimated £18 billion pub industry, which supports around 800,000 jobs.

A survey conducted by the organisation shows that more than a third of people would reconsider a trip to the pub if beer prices increased. It also showed that a decrease in pubs could cause more than just financial loss, with 77% saying that they go to the pub as a place to relax and unwind, and two in five saying it acts a social hub.

David Cunningham, programme director of Britain’s Beer Alliance, said: “Pubs are the heart and soul of our culture and communities, they support many jobs, contribute significantly to the economy and are dear to people’s hearts right across the country.

“Pubs already face a range of tax pressures and if the Chancellor raises beer duty in line with Retail Price Index inflation as planned on October 29, pubs will feel the pinch even more. Seven in every 10 alcoholic drinks sold in a pub is beer, so it’s easy to see how a small tax increase adds up over a year.

“Based on current closure rates, we estimate that within five years more than one in 10 pubs in the UK will have closed for good, costing thousands of jobs. This will have a devastating effect on communities up and down the UK.”

There are six breweries in Northampton, supporting 1,326 jobs and adding £31 million to the economy, according to the Oxford Economics analysis.

Altogether, the local pub, brewery and beer trade in Northampton adds £109 million to the economy , it says.