Pub closures highlight plight of on-trade

With the Budget just over a week away, new figures released today from the British Beer and Pub Association has laid bare the extent to which the UK pub trade is suffering as a result of tough trading conditions and increasing beer duties.

The BBPA figures show that pubs are closing at the rate of 25 per week across the country and the body has called on chancellor George Osborne to abandon plans for a 7% increase in beer tax in the Budget next Wednesday.

The association said that with the right policies, the beer and pub sector, which employs almost one million people, could play a leading role in bringing the economy out of recession.
 
While the closure rate has slowed from last year’s 40 per week, there were almost 1,300 fewer pubs in Britain by the end of 2010, according to the BBPA.

With a typical pub employing around 10 people, this represents a net loss of jobs of around 13,000 across the county. The rate of losses is highest in London and the North West, though all regions are suffering a decline.
 
With beer still the key seller for pubs, consistent increases in beer tax, which has gone up by 26% since March 2008, are a huge drag on the sector, says the BBPA.

The government is planning a further 7% rise in duty in the Budget, through the controversial policy of the beer duty escalator. This is set to add 2% above inflation to the existing duty burden, which would add 3.5p in beer tax on a typical pint, with bar prices set to rise by up to 10p a pint.

Taken with the VAT increase in January, the government is heading for the biggest ever tax hike on beer in a single year.
 
BBPA chief executive Brigid Simmonds said: “The closure of 25 pubs every week is bad news for the economy, as the sector plays such a vital role. It’s also a blow for local communities, with pubs often acting as the hub of local life.
 
“With the right policies, this vital part of our tourism and hospitality sector could be creating new jobs, and helping to bring Britain out of recession. If we really do have a pub-friendly government as the Prime Minister says, the time to act is now – with a freeze in beer duty in the Budget.

Alan Lodge, 16.03.2011