Legislation

Beer prices could soar by 30p a pint

By Michelle Perrett

- Last updated on GMT

Report claims: a combination of costs is blamed for adding to the price of a pint
Report claims: a combination of costs is blamed for adding to the price of a pint

Related tags: National living wage, Price, Pint, Pint glass

The price of a pint of beer could be set to soar by 30p as pub companies face a “triple whammy” of pressures in the New Year, The Sunday Times has reported.

The “perfect storm” of Brexit-related inflation, soaring business rates and the introduction of the national living wage would add an estimated 4% to overheads.

The report said that many of Britain’s biggest managed pub operators, including Greene King, Fuller’s and Mitchells & Butlers, have told the Government they will have no choice but to increase prices if they are not shielded from at least some of the headwinds.

The news comes after as pub operator Young’s said it would see £1.8m added to its cost base​ when the business rates revaluation comes into force in April 2017. It also said that uncertainty over Brexit and the cost pressures of the national living wage and apprenticeship levy were also major challenges.

Association of Licensed Multiple Retailers chief executive Kate Nicholls told The Morning Advertiser​ that price hikes were “inevitable”.

However, she would not be drawn on the 30p on a pint figure and said that operators would have to make difficult choices on where to increase prices.   

“Operators will do everything they can to avoid it, particularly when we are in such a sensitive market post-Brexit. But it is inevitable at some point prices are going to rise,” she said.  

“The biggest threat is business rates because it is the point where there is no flexibility as it is a fixed cost."

She said the lack of transitional relief for business rates meant that there would be an added burden on businesses.

British Beer and Pub Association chief executive Brigid Simmonds said: "There is no doubt that there are big cost pressures; the national living wage will cost pubs around £35m this year, but it is not the only new measure that is adding to costs, with auto-enrolment pensions and the apprenticeship levy also playing a part.

“The revaluation will lead to some big increases in rateable values for pubs, as much as 45% for some pubs in London, and we have severe concerns about the impact.

"In London, pubs have seen a high increase in their total nominal business rates bill, with the region now paying £14.1m more following the revaluation and reform of rates. This means that the average pub faces an increased bill of £3,629 and transitional relief is undoubtedly needed.”

Related topics: Beer, Legislation

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