The difference in duty is noticeable at £1.04 per litre packaged and £0.98 per litre on draught. I know that’s not a king’s ransom but it is the very difference that we have asked for every year with the ‘cut the duty’ campaigns.
Why don’t we hear supermarkets clamouring over how ‘unfair’ this differential is? Why don’t we notice this differential when we buy in? Well, the supermarkets are better at lobbying than pubs. The truth is pubs are appalling at lobbying so we let the brewers lead, after all they wouldn’t want what’s bad for us, would they? If you look at the difference in wholesale selling price (WSP) (the price on which every purchaser’s price is based), the differential reverses and packaged costs £5.75 per litre v £6.41 for draught.
So why the big difference and, most importantly, where are all the ‘1p off a pint’ from successive Budgets? The brewers have not changed the WSP of packaged products since the previous Government, and the current one, started shifting the tax burden from draught to packaged.
Selective in picking arguments
This is what intelligent and powerful lobbying does. The supermarkets take the Government’s duty shift on the chin, publicly at least. They can see arguing against the theory the pub is a more regulated environment for the consumption of alcohol is, frankly, daft. So, do the big retailers let the duty differential slide? Of course not, just as they are selective in picking their arguments so they are selective in choosing their audience.
They lobby the brewers, using their big purchasing power and not only do they remove the differential they actually reverse it. All quietly, all behind closed doors, all while being seen to be in agreement with the Government’s ambitions.
This is where we fail as an industry. We campaigned for duty cuts but we took no notice when the victory didn’t translate into invoice pricing. Why are we not lobbying the Government to push the brewers into passing on the differential that they, the Government, intended? The numbers may not be huge but they are costed, budgeted and accounted for. Indeed, the money, intended to ease the burden on draught, is not finding its way to the exchequer, rather it is being used to subsidise the off-trade to our detriment.
Learn from the off-trade
As an industry, we need to learn from the competition and be more selective with our battles. Pushing the Government to put pressure on the brewers to enact parliament’s intent and create a differential in draught’s favour is a, relatively, easy win. The Government have the leverage to push the brewers and love to have a villain that is not themselves. Best of all, a win is zero cost to the Government which is, to be fair, its favourite price to pay. Creating and driving this differential will have wider public support, again because it is zero cost to the economy.
The current clamour over business rates is not so well received with the general public, which can be seen with a quick scan of comments on the nationals. We are seeing rates bills returning to pre-pandemic levels as valuations follow post-pandemic turnovers. Rather than the rational, long-running and reasonable campaign to reform the system with its outdated bias towards hospitality venues we are seen as shouting about bills that we have always had.
The argument for reform has been heard and the change to the multiplier is a small move in the right direction. As an industry, we do not generate the returns to the exchequer that the big retailers do and we certainly don’t have the slick and professional lobbyists.
However, as a trade, we are better than being stirred up by brewers who don’t have our interests at heart and we are better than shouting at every invoice. We can (and should) choose our arguments wisely and our audience carefully. Framing our arguments well will, in the long term, make all the difference.
