Budget 2013: Pubcos and breweries pass on beer duty cut

By Michelle Perrett

- Last updated on GMT

Related tags: Beer duty, Beer duty cut, Public house

Budget 2013: Pubcos and breweries pass on beer duty cut
The majority of pubcos and brewers have promised to pass on the beer duty cut announced in last week's Budget to both their licensees and customers.

An investigation by the Publican’s Morning Advertiser​ has revealed that major pubcos including Enterprise Inns, Punch Taverns, Admiral, JD Wetherspoon, Greene King, Star Pubs and Bars, Spirit Pub Company and Marston’s have stated they will be passing the duty cut onto all its lessees.

Other pub companies Shepherd Neame, Fuller’s, Everards, Charles Wells, Wadworth, McMullens have also promised to pass on the cut.

The general beer duty rate was reduced by 2% from 25 March 2013.  Duty rates on low strength beer were reduced by 6% and on high strength beer by 0.75%. This equates to 1p on a pint of standard beer.

Pub operator JD Wetherspoon is reducing the price of a pint of Ruddles Bitter and Greene King IPA to a maximum of £1.99 a pint in its pubs.

The company’s pubs which already serve the two beers at £1.99, or less, will reduce the price by 5p. This will apply to 845 of its 870 pubs, with just Wetherspoon’s central London and airport pubs excluded.

Wetherspoon chairman Tim Martin said: "The effect of the Budget has been to increase our excise duty costs by approximately £1.5m, since the rise in duty for wine, spirits and cider was greater than the decline in beer duty. Other tax increases in the pipeline for rates, fruit machines and the late night levy will cost an additional £6 million.

"However, Wetherspoon warmly welcomes the concession from the Chancellor in respect of beer and, as a result, we are reducing our prices."

Brewer JW Lees said that it has decided to cancel its wholesale price increase in which was set at 6p per pint and will absorb the increased cost of input prices including ingredients, production costs and wages.

Managing director William Lees-Jones said: “We were gobsmacked by the Chancellor’s announcement that not only was he going to stop the beer duty escalator, but also reduce beer duty by 1p per pint and so we have decided that it would be unfair of us to put our prices up on any of our beers, including new product launches, despite our cost increase.”

Peter Furness Smith managing director at McMullens, said: “All tenants make their own pricing decisions which will have to take into account the increase in their other major costs over the last 12 months, such as rates, energy and wages, along with the recently announced changes in duty which will be passed on to them.

“In McMullen’s managed pubs where we price in multiples of 5p we have decided to reflect the impact of all the duty changes (beer down 1p but cider, wine and spirits up) in two ways - firstly, by reducing the price of a pint of draught beer by 5p in 26 of our community pubs and secondly, in our other managed pubs, we will donate the net benefit of the duty changes to charity instead of reducing the price of beer by 1p per pint.”  

Related topics: Beer

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