The British Beer and Pub Association (BBPA) has welcomed publication of the House of Lords’ Economic Affairs Committee report, titled Measuring Inflation.
The BBPA contributed to an inquiry which informed the report, proposing that the government should switch to the consumer price index (CPI) in all areas where the retail price index (RPI) is currently used to apply inflationary increases. The report has included this proposal from the BBPA as one of its key recommendations to the government.
The government currently has year-on-year RPI-linked increases planned for beer duty, which means that it will likely increase by at least 3% every year for the foreseeable future.
Beer duty has increased by more than 60% over the last 17 years, and now the UK has one of the highest rates of duty in Europe, which is a key factor behind the closure of many of the UK’s pubs.
The government has already agreed to switch increases applied to business rates from RPI to CPI, and has brought forward plans for the switch, which pubs have welcomed.
Brigid Simmonds, chief executive of the BBPA, said:“The number of pubs in the UK is falling, with pubs facing increasing and considerable tax pressures from a range of sources; particularly high beer duty, unfair business rates and VAT. This is deeply concerning, because pubs are a great British institution and are often the social hub of their community.
“Beer duty is particularly burdensome for pubs, and the government has year-on-year RPI-linked increases planned for it, which will see beer duty increase by at least 3% every year for the foreseeable future.
“Increasing beer duty has a real effect on footfall in pubs, so we welcome the recommendation of the House of Lords’ Economic Affair Committee report for the government to switch from RPI to CPI. This will not stop us calling for beer duty to fall further, given that we pay 40% of the total beer tax across Europe, but only consume 12% of the product, but it is a step in the right direction.”