Budget 2015: Reaction from the pub trade

By Ellie Bothwell contact

- Last updated on GMT

The trade has welcomed George Osborne's announcement
The trade has welcomed George Osborne's announcement
Industry figures and organisations have responded to George Osborne’s Budget, in which he announced a 1p per pint cut in beer duty for the third year in a row.

Brigid Simmonds, chief executive of the British Beer & Pub Association

“The Chancellor really is a ‘Hat Trick Hero’. His third, successive beer tax cut shows he has listened to consumers, publicans and brewers.

“Beer tax is now ten pence lower than it would have been under the beer duty escalator, which he abolished. 

“It will boost employment by 3,800 this year alone and attract new capital investment. It will put 180 million pounds in the pockets of beer drinkers and pubgoers.  That is a huge difference.

“Cutting beer duty supports a great British Industry which contributes £22 billion to GDP and supports almost 900,000 jobs.  It’s also a boost for pubs, as beer accounts for seven out every ten alcohol drinks sold in our pubs."

Mike Benner, managing director at the Society of Independent Brewers

“This is a great day for British independent brewers, pubs and consumers.

​We applaud the Chancellor’s decision to support British beer with this historic third cut in beer duty.  It continues the momentum of the cuts in 2013 and 2014 and will boost growth, employment and investment in the independent brewing sector.

“In SIBA’s Budget 2015 submission, we showed the positive impact of the first two cuts on our member brewers, who have invested the ‘penny off the pint’ in their businesses. The Government can be confident that this third concession will be put to the same good use by Britain’s independent brewers, bringing jobs and investment to hundreds of local economies around the country.”

Frederic Landtmeters, managing director at Molson Coors (UK & Ireland) 

"As an industry which contributes £10 billion in taxation each year, it is great to see that the Government continues to recognise just how important the beer and pub industry is to the wider economy.

"The successive duty cuts have not only given a much needed boost to beer drinkers across the UK, but have helped the wider industry benefit from extra investments – including over 16,000 new jobs created within the sector. We hope that the Government to continues to work in partnership with our industry to build on these successes.”

Tim Page, chief executive at the Campaign for Real Ale

“CAMRA is delighted with today’s hat-trick of an unprecedented third consecutive cut in beer tax, with another penny of a pint, which will be welcomed by millions of beer-drinkers across the country. The last two cuts have already had a huge impact, saving over 1,000 pubs from closure and keeping the price of a pub pint down.  Independent research by CEBR forecasts that the price of a pub pint will now be more than 20p cheaper than it would have been had the beer duty escalator remained in place.

“A third cut in beer tax is a huge vote of confidence in the importance of pubs and brewing. It will help ensure the sector returns to long term growth after many years of pub closures and falling beer sales, caused in part by a 42% beer tax increase between 2008 and 2012, and throw a lifeline to struggling community pubs across the country.

“Britain is known around the world for great pubs and real ale, and we should all be incredibly proud that this industry has just reported growth for the first time in a decade. We hope Britain’s millions of pub goers will head to their local this evening to give three cheers to a historic third cut in beer tax!”

Andrew Cowan, managing director at Diageo Great Britain

“Thousands of people across the nation will this evening raise a happy toast to the Chancellor. The alcohol industry generates billions for the economy and flies the flag for the UK abroad. This cut will mean that a 400 year historic industry like Scotch whisky will remain a crucial, and vibrant, part of the British economy for many more years to come.”

David Frost, chief executive at Scotch Whisky Association

“This is a historic decision and only the fourth time whisky duty has been cut in a century. 

“The Chancellor’s announcement will be toasted across the whisky industry and by consumers who are getting a fairer deal on tax when they have a drink of Scotch. The move is a major boost to our industry as we look to grow again in the UK, and equally sends out an important signal on fair taxation to our export markets.  

“The industry is raising a glass to George Osborne and his Treasury team, as well as to all those who have supported our campaign over the last two decades.”

Kate Nicholls, chief executive of the Association of Licensed Multiple Retailers

“Today’s measures will undoubtedly benefit licensed hospitality businesses, giving our customers more money to spend and our businesses more to invest. Combined with continued action on alcohol duty our trade has the tools at its disposable to make the best of increased confidence and spending.

“It is especially welcome that the Chancellor has recognised the importance of support for business employing apprentices, with confirmation that they will no longer by liable to National Insurance from 2016. The cost of this jobs tax is a major burden on employees and employers alike. It is also extremely heartening that the Investment Allowance will not fall to the incredibly low level of £25,000 as originally planned. 

“We were also encouraged by the Chancellor’s stance on business rates and look forward to engaging fully with the review in order to ensure a fair outcome for licensed hospitality businesses.”

Martin Thatcher, chair of the National Association of Cider Makers
"We are delighted that the Chancellor has decided to support the British cider industry by cutting duty in his Budget Statement. This is a very welcome decision and proves the Government understands the huge importance of our industry to rural communities.
"This important decision will be celebrated by cider makers up and down the country as it protects the investment they have made over many years to grow the industry and support thousands of jobs. We and all cider drinkers will be raising a glass of delicious cider to the Chancellor this evening."

Simon Theakston, executive director of Theakston Brewery

“This is good news and we will be celebrating in Masham tonight.

“Our industry has been squeezed for far too long and this reduction, the third year in row, recognises the importance of the British brewing industry and also the role of pubs and clubs at the heart of the community.

“This will give pubs and breweries a growing confidence to invest in their individual businesses, leading to the creation of jobs, particular for young people at the beginning of their careers.”

Greg Mulholland MP, chair of the Parliamentary Save the Pub Group

"Although expected, it is no less welcome that the Coalition Government has delivered a third successive cut in beer duty, following the decision to cut the hated beer duty escalator, which is more good news for Britain's brewers and beer drinkers. Cider produces and drinkers will also be welcoming a cut in cider duty.

"Alongside the decision to introduce a statutory code of practice for the large pub companies including the all important market rent only option and the strengthened assets of community value scheme, we are seeing the fruits of success of the campaigning of the Parliamentary Save the Pub Group and the Group and its pro pub MPs will continue to campaign for call for measures to help British pubs and the brewers who supply them".

Richard Westwood, managing director of Marston’s Beer Company

“This is great news for the industry which employs nearly a million people across the UK. This third consecutive reduction in beer duty, which we have constantly called on the government to act upon, enables businesses to continue investment as we have demonstrated with our £7m state of the art bottling line in Burton on Trent, opened just over a year ago. This further reduction means more long term planning, more jobs and better prospects for the sector."

Rooney Anand, chief executive officer at Greene King

“We are pleased to see the Chancellor has cut beer duty for a third straight year. The penny off a pint will be passed directly onto our hard-working licensees with immediate effect while, in our retail business, we will pass on the potential saving by investing it in creating additional jobs and delivering further customer service improvements in our pubs.”

David Forde, managing director of Heineken

“We are delighted that the Chancellor has delivered a historic hat-trick of duty cuts for beer and a cut to cider duty.  This momentous result recognises that brewing, cider making and the great British pub are crucial to the UK’s economy and will ensure that a hard earned pint remains affordable. Cheers Chancellor!”

Tim Hulme, chief executive of the British Institute of Innkeeping

"The BII welcomes a third successive beer tax cut by the Chancellor and the positive impact this will have on the thousands of BII members across the country.  The 1p reduction in duty on beer, the 2% reduction on cider and spirits and the freezing of wine duty will help many independent operators. Importantly, the measures combined with the abolition of NI contributions for apprentices will further boost industry's confidence in investing in its workforce.

"There is much work to be done though, particularly in supporting young people into a sector where more than half of the workforce is younger than 30."

Bruce Ray, corporate affairs director for Carlsberg UK

“Today’s 1p cut in beer duty is further tremendous news for Britain’s brewers, publicans and everyone who enjoys a pint of beer in the pub.

“It will support continued investment in jobs, innovation in new products and expansion from brewers, big and small.

“Through this investment brewers like ourselves are able to demonstrate the crucial social and economic contribution that we make to the UK, underlining what beer gives, rather than takes away, from our society.

“We truly appreciate this momentous third cut in beer duty by the Chancellor, which is testament to the valuable cross-industry work led by Andrew Griffiths MP.”

Keith Knowles, chairman of Perceptions Pub & Bar Careers Group

“The scrapping of NI contributions for apprentices will help to further encourage the industry to assist the government in reducing the level of unemployment amongst young 16-24 yr olds, which today stands at over 743,000.  Thousands of apprenticeships were recently pledged throughout Apprenticeship Week from companies including Spirit Pub Company, TGI Fridays, Mitchells & Butlers, Stonegate Pub Company, Greene King,  Fullers and Young’s and my own international business Beds & Bars, demonstrating the huge opportunity that exists within pub and bars across the country.  

"This move will enable many more companies, including the smaller multiple operators and independents to really get behind this scheme which brings young people into valuable long-term careers. I encourage companies to pass the savings on and invest them back into apprenticeships pay.”  

Related topics: Legislation, Other operators

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NL

Posted by ken nason,

Excellent and concise breakdown of how things are and a refreshing change from "it's all the pubco's fault".

this industry doesn't operate in aprotected vacuum untouched by what goes on in the rest of the world.It is not all about the tied sector though some would have us all believe it is. Yes tied are probably more sensitive to price increases because they gave away the right to negotiate their purchasing power when they signed up.

As stated tax and wholesale prices are not the same. If you cannot compete with supermarkets on price then don't compete go your own way and find another market in which you can get the price you need to make a profit.

For goodness sake stop moaning and get on and do it.Supermarkets are not going to change their marketing policies because tied traders are feeling the pinch. Get on with it

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anti duty cut posters

Posted by Northern licencee,

There seems to be a conflating of several arguments into one here. Whether or not brewery (not pubco) price increases are justified is a tricky question. My personal rate of inflation is negative at present; my business one is positive so I have raised my prices. How brewery increases reflect in the final selling price to the consumer is also difficult to ascertain. I reduced my beer prices for several years post 2008 funded by swapping products, increasing margins elsewhere, cutting overheads principally staff and entertainment to reflect the downturn in business and finally accepting (albeit very reluctantly) a reduced lifestyle for myself. So to a consumer my increased buying price was not reflected in the selling price. Nor do I think you can make any inference about brewery prices to supermarkets from selling prices.

The reduction in duty rates is an unalloyed good, thank you very much chancellor. The contrast with your predecessor’s ruinous increases is very welcome. Frankly anyone in our industry who thinks otherwise is living in a very strange world.

Now we are getting onto the difference in pub and supermarket pricing. Over many years up until very recently the big supermarkets have built bigger and bigger stores and taken larger and larger shares of the market. This has meant the average overhead per pound of sale in supermarkets has relentlessly gone down. They now face competition and to their horror it’s from deeper discounters, as all their recent results show their reaction has been to cut deeper into their profit margins by discounting, with alcohol an addictive drug it is hardly surprising if it has been used as a prime weapon in this war. In the meantime in the on trade what has happened to our overheads? Principally buildings and wages. Prior to the financial crash property costs were rising dramatically. Post-crash negotiating a decrease is very difficult, whether you are tied or free. Wages, largely driven in our industry by the minimum wage, have risen quite sharply. Turnover due to recession and changing lifestyle has gone down so the cost per pint of these overheads has risen very sharply. Hence the yawning gap. This is not an effect of the pubcos (though I don’t think they helped, indeed made it worse when they could have been supportive) but of wider economics.

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Oh but david

Posted by Anti-Pub Self Regulation,

david. I hate to contradict you but it must be the ambiance in tied pubs.

The positivity and smiles from supposedly being a happy tenant content with their landlord must be worth five times the price of beer in a supermarket!! Not

I too don't understand Interested Observer's conundrum

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