RPI hike to hit beer prices and rent

By Gurjit Degun

- Last updated on GMT

Related tags: Consumer price index, Renting, Cost, Government

More than half of tenanted pubs are RPI-indexed on rent
More than half of tenanted pubs are RPI-indexed on rent
The BBPA has called for the Government to scrap "record-breaking" tax rises on beer, as the RPI reaches 5.1%

The British Beer and Pub Association (BBPA) has called for the Government to scrap "record-breaking" tax rises on beer, as the Retail Price Index inflation reached 5.1%.

The rise means that a pint could cost 10p more if the Government presses ahead with plans to increase beer duty 2% above inflation in the March Budget. The price of a pint has already risen 35p since 2008.

But the rise will also put a further squeeze on tied tenants with an annual RPI-indexed rent increase.

More than half of the country's tenanted pubs have RPI increases written into their leases. Those with annual reviews due between 1 and 31 January will now see an extra rise in rental costs.

Vicious circle

Today's figures also show that the price of alcohol rose by 6.7% from December to January alone — a record monthly rise.

BBPA chief executive Brigid Simmonds said: "With these inflation figures, and along with the VAT increase, the Chancellor is set to introduce the biggest ever rise in tax on beer in a single year.

"The Government is creating a vicious circle of rising taxes causing further rises in inflation, which leads to yet more beer tax hikes in the future.

"At the end of this chain reaction, real people in real pubs lose their jobs, and vital community assets are lost.

"Yet there is a far better way forward. Scrapping the escalator would give an immediate lifeline to struggling pubs, and could save over 10,000 UK jobs in a single stroke, bringing in more government revenues. It is surely time to call a halt to a policy that rightly belongs in the past."

Related topics: Beer

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