Pubs 'fail to pass on duty cut' but supermarkets do

By John Harrington

- Last updated on GMT

Related tags: Beer prices, Consumer price index, Alcoholic beverage

Off trade discounts mean price cuts for consumers
Off trade discounts mean price cuts for consumers
Pubs are continuing to increase beer prices despite the duty cut, new research from Wilson Drinks Report has claimed.

Using research on pricing at pubs carried out in the months immediately following the Budget, WDR says pubs and bars, unlike supermarkets, have not passed on the duty price cut announced in the Budget in March.

But it said that discounting in the off-trade has led to a fall in the price of beer for consumers for three consecutive months.

The research using new Consumer Price Index (CPI) data and its own analysis, reveals beer prices in the on-trade have not fallen over that period.

Pub prices up

Tim Wilson, managing director of the Wilson Drinks Report, said: "Beer drinkers had a dose of good news in the March Budget when Chancellor Osborne announced a token cut in beer duty together with the scrapping of the beer duty escalator. These latest CPI inflation figures show that beer prices on average are less than last year, which is good for the consumer.

"Our analysis of price changes in the marketplace, however, indicate that it is only in the off trade (eg supermarkets, off licences) that beer prices are coming down. Most pub and bar operators are still putting beer prices up despite the cut in beer duty.

"In fact the alternative set of RPI inflation data confirms a broadening disparity between the price of beer in the pub and the price in the supermarket."

Cost of beer falls

The report, which also examines Office of National Statistics data combined with its own analysis, pointed out that the cost of beer overall for consumers fell by 0.5% in October against the same month in 2012. It followed a year-on-year decline of 0.6% in September and 0.7% in August.

Inflation on wine and spirits remained much higher. Wine prices increased 2.8% in October 2013, whilst spirits rose 6.4%.

Meanwhile, the research also shows that the rate of inflation on purchases at restaurants and cafes has consistently come in between 2.6% and 3% since September 2012; in October 2013 it was 2.9%.

Related topics: Legislation

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