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Pubs will close, insists brewery founder

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Greg Pilley, founder and MD of the popular Stroud Brewery, has reacted with disappointment and frustration at the Government’s lack of support for the pub and brewing trade shown by the Spring Budget yesterday, and predicts that the next year could see more pubs going out of business.

Whilst alcohol duty was frozen for another year, this won’t make any difference to the large economic pressures that pubs are dealing with at the moment, and which led to 508 pubs around the UK shutting in 2023 with the loss of over 6,000 jobs. Research done by Oxford Economics for the British Beer & Pub Association showed that a 5% cut in beer duty could lead to 13,000 jobs being created. 

Mr Pilley said: “It’s been a perfect storm for publicans during the past year. For example, energy prices have increased our annual electricity bill from £49,000  in 2022) to £116,000 (2024), but also made all other resources and supplies we use shoot up in price. Food inflation has hit 15%, interest rates remain difficult, and the living wage hourly rate is being increased. On top of that, the Government will be increasing business rates by 6.7% in April. Yet, pubs have seen a 6.1% downturn in sales revenue on average during the year to November 2023. Stroud Brewery’s income has increased by £250,000 compared to this time last year, yet we are only just breaking even currently because of all the cost increases we’ve had to absorb.”

He continued: “The hospitality sector is the UK’s third largest employer, contributing £93 billion to the economy annually and employing over 3.5 million people. We needed the business rate increase to be abandoned and the disparity in alcohol duty charged on beer bought in supermarkets compared to that bought in pubs and licensed venues to be made greater. NHS Digital statistics show the affordability of beer was the same in both outlets in 1987. By 2020, beer had become twice as affordable when bought in retail outlets like supermarkets compared to what it cost in pubs and licensed venues.

“There are also health implications as more alcohol tends to be drunk at home where, out of a social setting, there is less moderation. Worse health and social outcomes can result, with knock-on costs for the NHS.”   

Mr Pilley feels a remedy to the crisis should include an increase in the business rate due in April should be abandoned, the alcohol duty charged on packaged beer bought in retail outlets to be increased and differentially higher than that charged on beer bought in pubs and licensed premises and a reduction in the VAT applied to hospitality venues to 12.5%.

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