Fuller's chairman blasts government over duty rises

Fuller Smith & Turner chairman Michael Turner has demanded that the Chancellor of the Exchequer scraps the duty escalator mechanism, which will see duty raised by two per cent above inflation at the next Budget, and forgets about increasing tax on beer in the coming year.

Turner said the Chancellor's duty increases of 17.8 per cent during the past year had "had a devastating effect on some of our customers.

"It is essential that the duty escalator which was announced last year is now withdrawn, and that there should be no further duty increases in the forthcoming budget."

Turner said Fuller's beer volumes were outperforming the market, "but the British beer industry is not resilient enough to pay any more".

"I appeal to the Prime Minister and the Chancellor to stop adding to the misery that licensees are suffering due to the economic downturn by adding any further burdens.

"The costs of compliance with the seemingly endless legislation that licensees have to cope with has meant that the tipping point has now been reached.

"The British pub is the home of responsible drinking, and the envy of the world. The entrepreneurial characters that run their community pubs should be respected for what they add to our society, and not pilloried and legislated out of business."

Turner was speaking as the London brewer announced like-for-like sales across its Inns Managed Pubs business in the first 7 weeks to 15 November 2008 up by 1.8 per cent.

The group said in the 10 week period from 16 November 2008 to 24 January 2009 turnover rose 4.5 per cent, increasing the year to date like-for-like sales growth figure to 2.7 per cent.

However like-for-like profits in the tenanted division continued to be down one per cent for the 43 weeks to 24 January 2009.

Fuller's own beer volumes "remain marginally behind last year", at one per cent down for the 43 weeks, but it said overall market share continuing to grow and margins holding up well.

Echoing virtually every other operator in the sector Turner said the trading environment for the remainder of the financial year was unlikely to improve.

He added that Fuller's would "experience very high like-for-like increases in energy and raw materials costs for the remainder of this financial year and into next year", as cheaper forward contracts on energy came to an end.

However Turner said the group "remains confident that adjusted profit before tax for the year will be within the range of market expectations".