Beer

Profit fears over 'undrinkable beer' from the Punch Tenant Network

By Emily Sutherland contact

- Last updated on GMT

Lindesay argues information about how much duty has been paid on beer is not getting through to licensees
Lindesay argues information about how much duty has been paid on beer is not getting through to licensees

Related tags: Cask ale

Not enough is being done to inform licensees how much drinkable beer is in a barrel, leading to potential confusion over missing profits, according to one campaigning licensee.

Chris Lindesay, of the Sun Inn, Dunsfold, Surrey, who heads up campaign group Punch Tenant Network, argues that information about the amount of undrinkable sediment in cask-conditioned beer is not being passed on to licensees, and claims many are led to believe a firkin contains 72 pints of saleable beer when it could contain as little as 68.

HMRC passed a concession stating that duty doesn’t need to be paid on the undrinkable sediment in cask-conditioned beer — as long as publicans are made fully aware of the quantity of beer on which duty has been charged. Some brewers are already doing this.

Lindesay told the Publican’s Morning Advertiser​: “We’re calling on every brewer, wholesaler and pub company to include the HMRC ‘drinkable volume’ on their price list because there is no other reliable way to ensure the message is passed down.

“Given the current controversy over low profitability and earnings in the tied tenant sector, it is clear inexperienced operators can be caught out when not given the information they need to plan their business and end up hunting in vain for planned, but inexplicably missing, profits.

“If licensees stick to training, which claims there is 72 pints in a firkin, they could be out of pocket by as much as £10 per firkin.”

Lindesay has produced a report, in which he claims it could also impact on how tied rents are calculated.

He added: “Tenants must also pay a rent amounting to approximately half of the remaining net profit of the entire pub business. With cask ale, tenant’s profits are assessed on the assumption the tenant sells all 72 pints in a nine-gallon firkin.”

However, a spokesperson from Punch strongly disputed his claims.

“We had correspondence on this issue in the past and provided a comprehensive response. We have arranged to meet Mr Lindesay again to gain a better understanding of the assumptions in this report as we do not recognise the quoted figures or how they influence a negotiated and agreed rental settlement between two parties.”

Related topics: Beer

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