The news that inflation has hit a six-month high is worrying for pubs and brewers alike, says the British Beer and Pub Association.
Beer duty is linked to the retail price index, which rose by 3.5% in August, meaning pubs and brewers face a steep hike in taxes, just like under the beer duty escalator.
As a consequence, Britain’s brewers could see an increase of more than £100 million in tax in the next Budget. And the misery for pubs would be compounded by consumer price index increases in business rates.
BBPA chief executive, Brigid Simmonds, said: “£1 in every £3 spent in pubs already goes to the taxman, and under the beer duty escalator, which saw sustained increases to beer tax, 5,000 pubs closed and 58,000 jobs were lost.
“It’s clear that action is needed by the government to alleviate these cost pressures pubs face, else we risk losing them forever. This is why we are backing the Long Live the Local campaign to call on the government to cut beer tax and support local pubs.”