What were the pub trade’s biggest issues in 2018?
Budget
In the spring of this year (March), Chancellor of the Exchequer Philip Hammond vowed to protect local pubs by giving 90% of them a £1,000 business rate discount in the Budget (8 March).
Alcohol duty was set to rise for beer, cider, wine and spirits in line with inflation, which was met with disappointment from the pub trade.
However, in his Autumn Budget in October, the Chancellor revealed a cut in business rates for venues with a rateable value of less than £51,000. He also announced that beer, cider and spirit tax would be frozen but wine duty was set to rise.
When it came to staffing costs, the national living wage will rise to £8.21 per hour in April 2019 and Osbourne will be introducing a new digital tax on UK revenues of large technology companies in April 2020.
Beer prices
In January of this year, AB InBev and Molson Coors announced rises in beer prices to above inflation, making some beers and ciders up to 3.9% more expensive than in 2017.
The Morning Advertiser (MA) contacted other brewers including Charles Wells, Diageo and Heineken but they did not reveal any 2018 price changes.
The MA will continue to look into any beer pricing changes in January 2019.
Cask report
Sales of cask beer were falling quicker than overall beer sales in the on-trade, according to figures compiled by the British Beer & Pub Association (BBPA) and featured in The Cask Report 2018-2019, which was unveiled in September.
The BBPA found the cask beer market was down 6.8% in volume, from moving annual total figures to July 2018.
The figures also found that while the overall on-trade beer market fell by 1.6% in volume during the previous 12 months, some categories were showing signs of growth such as premium lager (up 2.2%).
CO2
In the summer this year, a shortage of food-grade carbon dioxide (CO2) hit pubs across the country and impacted their drink and food offer.
In June, operators were warned their lager and soft drinks sales could run dry if more CO2 was not produced soon, as stockpiles across Europe dwindled.
The MA then reported brewers were running low or had run out of products as the Europe-wide CO2 shortage worsened, putting a stop to brewing and packaging for many.
The shortage not only affected drinks but foodservice was also impacted with poultry experts warning suppliers of chicken could run out.
Conviviality
In May this year, leading wine supplier to the pub trade – Coviviality – warned it could fold if it failed to secure £125m to repay a £30m tax bill and millions to creditors.
Following this, the supplier filed notice of its intention to appoint administrators and pubs prepared contingency plans.
Then came the announcement that Bulmers cider owner C&C Group was in “advanced” discussions with Conviviality to buy Matthew Clark and Bibendum with support from AB InBev and less than 12 hours later, C&C confirmed the transaction had been completed.
