Tax hikes could cripple beer recovery
A small but welcome recovery in beer sales could be short-lived if the government once again slams on new taxes in 2010. The latest figures from the British Beer and Pub Association show that beer sales declined by just 0.8% in the third quarter of 2008, a significant improvement on recent periods.
But the BBPA warns that any fragile recovery could be threatened by the VAT increase due in January, which could put a further 6 pence on the price of a typical pub pint. Beer tax rose by 8% duty in the Pre-Budget Report in December, cancelling out the 2.5% VAT cut enjoyed by other sectors.
And the slow down in falling beer sales contains more bad news for pubs. The major growth in sales comes from the supermarket sector, with beer sales up by 4.4%. Pubs on the other hand have seen sales slump by 4.7%. This means that 4.3 million fewer pints were drunk each week during July, August and September compared with the same period for 2008. On average, 52 pubs are closing every week, unable to compete with supermarkets.
These latest figures are further bad news for government tax receipts. Money collected from beer tax in the first nine months of 2009 are down £174 million compared with the same period last year.
Brigid Simmonds, BBPA chief executive, commented: "These latest figures signal that overall beer sales are beginning to stabilise but beer sales in pubs continue to decline, contributing to the pub closure rate. This is a fragile situation that could well be jeopardised by the wrong decision on tax in the forthcomiong Pre-Budget Report."
But the BBPA warns that any fragile recovery could be threatened by the VAT increase due in January, which could put a further 6 pence on the price of a typical pub pint. Beer tax rose by 8% duty in the Pre-Budget Report in December, cancelling out the 2.5% VAT cut enjoyed by other sectors.
And the slow down in falling beer sales contains more bad news for pubs. The major growth in sales comes from the supermarket sector, with beer sales up by 4.4%. Pubs on the other hand have seen sales slump by 4.7%. This means that 4.3 million fewer pints were drunk each week during July, August and September compared with the same period for 2008. On average, 52 pubs are closing every week, unable to compete with supermarkets.
These latest figures are further bad news for government tax receipts. Money collected from beer tax in the first nine months of 2009 are down £174 million compared with the same period last year.
Brigid Simmonds, BBPA chief executive, commented: "These latest figures signal that overall beer sales are beginning to stabilise but beer sales in pubs continue to decline, contributing to the pub closure rate. This is a fragile situation that could well be jeopardised by the wrong decision on tax in the forthcomiong Pre-Budget Report."
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