Pubs and beyond: harnessing alcohol duty for everyone’s benefit

By Greg Pilley, managing director, Stroud Brewery

- Last updated on GMT

Duty calls: Greg Pilley wants the Chancellor to continue his 'bold approach'
Duty calls: Greg Pilley wants the Chancellor to continue his 'bold approach'

Related tags greg pilley Stroud Brewery Sustainability Social responsibility

Perusing through the news recently has brought into sharp focus just how great the pressures being felt by the sector are: during 2023, more than 500 pubs closed their doors for good.

As founder and MD of a brewery with its own taproom, I know what a bitter blow this will have been to all those involved. Putting my heart and soul into maintaining a pub as both a viable business and as a hub for the community means I can understand the publicans’ pain at having to call time on an occupation that is a way of life.

The issue isn’t just about the estimated 6,000 jobs lost. A pub is an essential part of its locality, bringing people together and offering support, solace, camaraderie and stress-busting punctuations amid the (increasing) pressures of daily life.

Many of these places are also custodians of local heritage with tales to tell about past times, sometimes dating back to previous centuries. Our aim at Stroud Brewery is to create a place that brings people together to meet, share, grow, laugh and learn. The fact that there are over 10 events a day on average taking place here is a good illustration of how integral pubs can be to creating thriving communities.

Differential needs to be greater

So what can be done to slow this loss? For me, an opportunity is alcohol duty. The Government has introduced a duty reform, creating a differential rate between small, packaged beer and bulk draught. Increasing this differential, as happened last year, was even better news.

I’d say the differential needs to be greater and reduced on draught beer – not only would this support pubs at a time of crippling costs, but also help protect the estimated £26.2bn our sector adds to the UK economy, and (believe it or not) support sustainability targets.

Draught beer is stored in casks or kegs, both of which are far more environmentally friendly. They’re re-used time and time again, reducing packaging to a minimum. They lead to fewer transport miles, and casks further minimise carbon dioxide emissions by using the beer’s natural fermentation to maintain internal pressure. Who’d have thought the price disparity could even contribute towards environmental protection?!

They're hardly struggling

Drinking in pubs has potential positive health outcomes, too: lower alcohol duty and prices lead to higher levels of drinking at home where, out of a social setting, there is less moderation. This leads to worse health and social outcomes with knock-on costs for the NHS. After the pandemic, UK alcohol deaths are at an all-time high, rising by 27% since 2019. Also, loneliness and isolation can increase the risk of early mortality by 26%.

‘Ah’, some might say, ‘isn’t this disparity unfair to supermarkets and shops?’. As 70% of alcohol is purchased in off-trade venues, especially supermarkets, they’re hardly struggling. NHS Digital statistics show the affordability of beer in off-trade locations growing from equality with on-trade venues in 1987, to being more than twice as affordable in 2020.

Supermarkets have the margins to be able to cut prices and have been actively doing so. And who pays for the collection and disposal of the packaging discarded from off-trade sales? The local authorities and council tax payers.

As the Chancellor contemplates his Spring Budget, I’d urge him to continue the bold approach and raise the duty on packaged beer and cider even more, ideally reducing them for the on-trade. In one move, he could throw a lifeline to pubs and hospitality, the UK’s plethora of artisan brewers and cider makers, and reduce the CO2 emissions attributable to our everyday tipples.

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