With Chancellor Rachel Reeves outlining Labour’s first budget today, Wednesday, Stroud Brewery boss Greg Pilley insists more support is vital to stop the industry from crumbling.
Mr Pilley revealed his thoughts ahead of the budget, he said: “Pubs are still recovering from a chain reaction of economic problems starting with the pandemic: two years of restricted trading during Covid, Brexit, the energy crisis, economic downturn, and the public eating and drinking out less as a result.
“The rapidly increasing energy costs had far-reaching effects, causing knock-on increases in prices of raw materials, supplies, transport, food, crops, for example. Food price inflation hit a rate of 15% in November 2023. A survey by the British Institute of Inn-keepers (BII) in September 2024 showed only half of pubs are breaking even. For the past few years, Stroud Brewery’s profits have been equivalent to only 1% of its turnover.
“The online gambling sector pays 8% tax on its turnover currently whereas hospitality pays 40%. The previous Government promised reform of the business rate system for the hospitality industry which must be honoured.
“Currently, business rate relief is in place but this is due to end on 31st March next year. A survey by UK Hospitality, the British Institute of Innkeeping & the British Beer and Pub Association revealed that 54% of hospitality businesses would reduce their employment levels if business rate relief was scrapped next year. They also estimate the average pub could lose £12,000 a year if the relief finished.
“The gap between the alcohol duty paid on beer packaged in containers such as cans and bottles compared to draught beer. This would make the cost of drinking beer in pubs similar to buying beer in supermarkets and drinking at home. Drinking at home has a potential wider effect for society – lower alcohol duty on packaged beer enables lower prices to be charged by supermarkets, potentially leading to higher levels of drinking at home. This, in turn, leads to worse health and social outcomes with knock-on costs for the health service. After the pandemic, UK alcohol deaths were at an all-time high, rising by 27% since 2019.
“Introducing a modest increase in the National Living Wage which is currently rumoured to be increased from £11.44p/hour to at least £12.12p/hour. Whilst we believe that the hard-working pub and hospitality staff should be paid a good wage, the previous minimum wage increase added £40,000 to our staff costs – we fully support a living wage, however the consequence is that these costs are subsequently passed on to the consumer, which then increases living costs and fuels the need for wage increases.”
