In a last-ditch appeal to the chancellor ahead of next week’s budget, two leading on-trade bodies have teamed up to warn that yet more British pubs will be under threat if he does not scrap his five-year plan to raise alcohol duty, in a repeat of calls from across the industry.
The Wine and Spirit Trade Association (WSTA) and the Association of Licensed Multiple Retailers (ALMR) say that the planned spirit duty increase of 3.4% would add 26p to a bottle of spirits and 7p and 9p to still and sparkling wine, respectively.
This, they say, as part of the government’s policy to increase duty by inflation over the course of this parliament, will see the Treasury earning an extra £280m from pubs over the next four years and £2.4bn per year by 2022. This would pile pressure on landlords at a time when British pubs are closing at an average rate of 21 per week.
‘Pubs in every region of the UK are facing a perfect storm of rising costs and softening consumer demand. Uncertainty and barriers to growth and investment are being exacerbated by the instability being created by Brexit and many venues are looking for positive action from the government to provide support,’ said Kate Nicholls, CEO of the ALMR.
‘An increase in duty rates is only going to pile on more costs which pubs cannot continue to absorb - prices will start to rise and threaten consumer demand even further.’
The planned rates hike comes just eight months after the 3.9% increase earlier this year, which added, per bottle, 30p to spirits, 8p to still wine and 10p to sparkling wine.
Over the 12 months to September, wine and spirits brought £6bn into UK pubs, but £843m of this – an average of £17,000 per pub – went to the Treasury. Wine and spirits now account for 36% of alcohol sales in pubs and the category now accounts for 46.2% of new openings in Britain (compared to 39% of closures).
‘The chancellor is in danger of missing a huge trick. Not only could he support British pubs by scrapping his plans to raise already punitive duty rates for a second time this year, but he could also show his support for the wider UK hospitality sector,’ said Miles Beale, CEO of the WSTA.
‘We know that previous decisions to freeze alcohol duty have brought in more revenue for the Treasury coffers, not less. So a duty freeze makes sense for everyone – from the chancellor, to pub and bar owners, and consumers. With the last rise having come just eight months ago, freezing duty is the least Philip Hammond can do!’
The Treasury has been contacted for comment.