I have asked myself this question many times.
Having talked in the past to the former Chancellor of the Exchequer, when he was ‘in power’ and regularly to our local MP, they felt that, as an industry, we ask for too many things at once and the ‘bodies’ that represent us seem to want different things to each other to suit their own agendas.
These are their words, not mine, and that our approach as an industry is somewhat fragmented… a ‘scatter gun’ approach was the expression used.
We try to hit everything rather than hitting one thing at a time with true conviction and precision. The big concern is these politicians think our world revolves around beer duty as a big priority, then possibly the hot topic that is business rates, then VAT, then national insurance contributions and then energy, then everything else… dare I go on?
I often sit back and think about their comments and my opinion is that our wonderful industry is exceptionally diverse. Of course, the diversity of our industry is what makes it so special but it is very clear no one appears to be able to really get to grips with the different needs we all have so we simply have to focus on the same needs we all have that would positively impact all of us.
The problem is that there are too many ‘injustices’ that surround our industry that at times we simply don’t know where to start.
As I have mentioned before no one cares about a penny off a pint so please can our bodies stop asking for it, like our lives depend on it. It’s a bloody distraction from the main events such as business rates, which is my first terrible injustice, as I mentioned last time… pubs are punished for doing well and do not get improved services from whom we pay the increased rates too. They squander it all, it’s outrageous.
It HAS to change.
Supermarkets pay nothing on food
‘Injustice’ number two is VAT in the UK hospitality industry. It is well documented we are the only country of all the western European hospitality industries to pay the same high 20% VAT amount on food, drink and bedrooms while supermarkets pay nothing on food and sell their beer cheaper than we can keep up with – as a loss leader in most cases.
Which brings me nicely on to ‘injustice’ number three. It is in the interests of supermarkets to kill off hospitality… they will sell more gastropub ‘ready meals’ and, of course, increase their sale of alcoholic drinks to homes on the cheap, where drinking is unregulated and unsupervised – unlike in a pub.
Pint prices in pubs have grown at more than double the rate of the average salary since 1990, according to research. The past two years have seen some of the biggest hikes over that time period. Pint prices have rocketed by 15.8% over 2023 and 2024, whereas inflation has risen by 9.8%. The price of beer has also outpaced the average salary increase over the past two years, which has been around 12.2%.
From this month, the BBA (I repeat, they have no interest in pubs) has said the average price of a pint of beer will cost more than £5. Why is that? It clearly isn’t duty anymore. It is because the big brewers keep hammering our industry with huge, untenable price hikes and we have to respond by putting up our prices to our loyal customers.
Some brewers are already warning about the need to push up prices to manage additional costs in their annual ‘we don’t give a damn about pubs’ price increases. They don’t give a damn about our customers either that’s the truth of it. In 1990, over 80% of beer was consumed in pubs and hospitality in general, a figure that dropped to about 50% by 2020 and has been made worse by Covid-19.
Supermarkets sell more beer than hospitality venues now because of the off-trade market, which focuses on convenience and price. This trend has been growing for years, driven by aggressive promotions in supermarkets and consumers increasingly choosing to drink at home because of price.
Lobby the larger brewers
My point here is that we don’t need to lobby Government about the price of beer, we need to lobby the larger brewers. Why don’t they put 20% price hike on supermarket cost prices for beers and balance the books and leave our cost prices where they are for two or three years to help the pub industry recover? If the BBA really cared about pubs they would be lobbying larger brewers right now to increase prices to super markets and NOT pubs.
If we really want to ‘lobby’ Government on beer prices in supermarkets why don’t we ask for a 30% VAT band on alcohol sold in supermarkets, the addition of at least 5% on food stuffs and the removal of VAT on all non-alcoholic beers and drinks? Then they can balance this with a reduction in hospitality. The Government thinks pubs are the root cause of all the drink-associated problems in the NHS but cheap booze in supermarkets is the prime cause.
I know what you are thinking... the supermarkets financially support Government parties to such an extent that they get all the upside while we suffer accordingly. That’s true, they do. While I do not advocate putting money into Labour party coffers, we do have to change opinion. We aren’t a bunch of moaners, we actually have some real issues with level playing fields.
For me, we have three key injustices to put right, two demand Government intervention and the other demands brewer intervention – do they want to help pubs survive or not?
There is no middle ground here. If they put prices up again for pubs and fail to recognise the imbalance with supermarkets then they don’t care about the survival of pubs at all.
If the pub increases come, there is only one way for us to go and that’s for as many of us as possible to stop buying from larger brewers as a protest and support local breweries who have a real need and a vested interest in our survival.
I wait with bated breath, after all... it’s just my opinion.
