In a letter signed by 80 senior figures from the brewing and pub sector the Chancellor has been reminded of the industry’s £34.4bn contribution to the UK economy.
The letter, compiled by the British Beer and Pub Association (BBPA), points out that the sector generates £18bn in taxes, while supporting more than one million jobs nationwide.
But, the letter says, despite this huge contribution to the Exchequer, soaring business costs are forcing many pubs to close. Since 2010, a fifth of UK pubs have been forced to shut down, with beer volumes dropping by around 10% in the same period.
“Our industry faces a cost of doing business crisis,” the letter says. “We know ministers are aware of our challenges; we have highlighted them clearly in our representations to government, and it is why the five-point plan for pubs was devised on the campaign trail.
“If that plan is not delivered, we will see pubs close and the end of the affordable pint. When a pub struggles to survive, it cannot continue to be the beating heart of a community, keep employing staff, or contribute to economic growth.”
An unfair tax burden
Despite recent freezes, UK beer duty remains nearly three times the European average, further compounding the financial struggles of the industry.
Pubs are disproportionately burdened by business rates, paying up to five times more relative to turnover compared to other sectors. The BBPA is advocating for an extension of the current 75% business rates relief, which has saved many pubs from permanent closure and a cut in duty.
The letter says: “This is an historic low, and the industry simply cannot afford other costs, let alone tax increases. Put plainly, for thousands of pubs and brewers across the country there is nothing left to give.
“Pubs and brewers contribute to the fabric of British life. Beyond their economic role, they are hubs of social cohesion, where communities come together. The Chancellor must recognise this in his upcoming Budget and ensure we do not lose more of these essential businesses.”
Cumulative pressures
The letter highlights several urgent challenges, including the projected fees associated with the Extended Producer Responsibility scheme, which is the equivalent increase in duty on glass bottles by 7 to 14%.
In addition, the proposed ban on outdoor smoking in pubs, which risks driving customers away, an anticipated rise in the National Living Wage, along with skyrocketing energy bills, all threaten to further erode pub profitability.
“The cumulative impact of these pressures cannot be underestimated. Each government-imposed measure adds to an already overwhelming cost burden, stifling growth and driving pubs out of business,” the BBPA letter explains.
The BBPA is urging the government to freeze beer duty beyond February 2025, cut duty rates over time to align with European averages, and maintain the current business rates relief until comprehensive reforms are implemented. Failure to act could result in widespread pub closures and a loss of local jobs, ultimately harming the very communities pubs have long supported.
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