UK: Beer sales suffer from big freeze

January’s big freeze hit beer sales, according to the latest UK Quarterly Beer Barometer. Pub beer sales fell by 8.8 per cent in the quarter and overall beer sales were down by 5.1 per cent on the first quarter of 2009.

The exceptional and severe weather in January, which prevented many from going to the pub, was the major contributor to the fall in sales. Given the continuing fragility in the beer market the BBPA is asking the Government not to increase pressure on the sector unnecessarily by increasing beer taxes in the Budget on 22 June. The year-on-year change in beer sales is improving – the rate of decline easing to 3.5 per cent in the year to March 2010 from 4.2 per cent in the year previously – indicating that there are some signs of an underlying improvement in the sector.

The five per cent increase in Beer Duty in the 2010 Budget came into effect as the quarter was ending, with fears that an effective increase of 8 pence per pint is likely to have a further depressive effect on future beer sales. The tax increase put a further cost burden of £161 million on the sector, at a time when many pubs are struggling. The 8.8 per cent fall in pub beer sales means that 6.9 million fewer pints were drunk each week during January, February and March compared with the same period in 2009 – a loss in volume that leaves many pubs under continued pressure.

Sales of beer in supermarkets and shops increased by 0.5 per cent in the first three months of 2010, compared to a fall of 10.1 per cent in the same period in 2009.

Brigid Simmonds, BBPA Chief Executive, comments: “These new figures show the economic environment remains tough and precarious for Britain’s pubs. The exceptional impact of winter’s icy blast has taken its toll, but this does not fully explain the extent of the current difficulties facing the industry. “The Budget in March raised our beer tax bill by a further £161 million. It means over the last two years beer taxes have increased 26 per cent raising costs by £761 million during a time of deep recession.

“We are looking for a new Government to approach the issue of beer taxation with a fresh pair of eyes. Both the Conservatives and Liberal Democrats have stated that beer taxation needs reform and pubs need support because of their value to communities. It’s time to deliver on those promises.

“As a first step we are looking for the Government to abolish the beer tax escalator. Secondly, if the Government does put up VAT we are looking for a compensatory reduction in beer tax. This would be a targeted measure to help pubs, because over half of beer sales are in pubs and 60 per cent of drink sales in community pubs are beer.”

SOURCE The British Beer & Pub Association