Budget beer tax hit could harm pub trade in Kettering and Corby

Customers collecting their drinks at the bar of Irish pub O'Neill's in Carnaby Street, central London. archive-YM20140418_YM1D0972169.J

Tax on beer is expected to rise by 3.4% in the Chancellor’s Autumn Budget, delivered later this month.

Consumers are already increasingly opting for cheaper supermarket drinks and with pub margins stretched, pubs are braced for further struggles.

Kettering’s 53 pubs and bars employ 629 people, paying them £5.1 million in wages, new analysis from Oxford Economics shows.

In Corby, there are 29 pubs and bars employing 413 people and paying them £3.3 million in wages.

In total, through salaries and spending power, the area’s pubs contribute more than £20 million to the local and national economy, the analysis shows.

Across the UK, 3.2 pubs have closed on average every day over the last two years. If that trend continues, Britain’s Beer Alliance, an umbrella organisation for major brewers and pub companies, says one in ten pubs nationwide could close within five years. It would mean a significant loss to the estimated £18 billion pub industry, which supports around 800,000 jobs.

A survey conducted by the organisation shows that more than a third of people would reconsider a trip to the pub if beer prices increased. It also showed that a decrease in pubs could cause more than just financial loss, with 77% saying that they go to the pub as a place to relax and unwind, and two in five saying it acts a social hub.

David Cunningham, programme director of Britain’s Beer Alliance, said: “Pubs are the heart and soul of our culture and communities, they support many jobs, contribute significantly to the economy and are dear to people’s hearts right across the country.

“Pubs already face a range of tax pressures and if the Chancellor raises beer duty in line with Retail Price Index inflation as planned on October 29, pubs will feel the pinch even more. Seven in every 10 alcoholic drinks sold in a pub is beer, so it’s easy to see how a small tax increase adds up over a year.

“Based on current closure rates, we estimate that within five years more than one in 10 pubs in the UK will have closed for good, costing thousands of jobs. This will have a devastating effect on communities up and down the UK.”

There are three breweries in Kettering, supporting 68 jobs and adding £1.5 million to the economy, according to the Oxford Economics analysis.

Altogether, the local pub, brewery and beer trade in Kettering adds £22 million to the economy , it says.