Beer prices are set to increase yet again, with one pub landlord suggesting the price of a pint in London could soon hit £7.
So what is the likelihood of this happening? And what about beer prices in the rest of the UK? Let’s take a look.
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Will beer prices increase to £7 a pint?
According to Clive Watson, chairman of the City Pub Company – which runs around 50 pubs in South England – ‘non-existent’ sales in January have led to ‘pub inflation’ hitting 10%. Speaking to BBC Four’s Today programme, Watson claimed pub landlords have struggled to grapple with rising inflation, including wholesale increases in the cost of food and beer.
This, coupled with supply chain issues resulting from the pandemic, as well as higher labour costs, means consumers may soon be burdened with higher beer prices. According to Watson, the price of a pint is set to go up by 40p to 50p.
With some pints in London already costing £6.50, pub-goers in the capital could soon be facing the prospect of paying £7 a pint! Should beer prices rise to this extent, then workers on the minimum wage would have to work over an hour to afford a pint of booze.
Those who regularly enjoy a beer at their local may be particularly concerned at having to pay more for a pint. That’s because it’s estimated more than eight in 10 pubs already upped their beer prices last year due to increased costs.
What about beer prices in other areas of the UK?
While London leads the way for expensive beer, prices will almost certainly rise in other areas of the UK as well.
According to Holidu.co.uk, the average cost of a pint is £4.40 in both Edinburgh and Birmingham. In Manchester, an average pint currently costs £4.20, while in Brighton it’s £4.10.
Assuming pint prices increase by 40p to 50p, as predicted, these cities will soon see beer prices nearing £5. While this is a long way off the £7 that could be charged in London, £6 a pint is certainly on the cards in some ‘upmarket’ pubs. [middle_pitch]
What is the pub industry calling for?
To help pubs during the pandemic, the government slashed the hospitality sector’s VAT rate from 20% to 5%. Some pubs passed on this savings to consumers while others, understandably, pocketed the saving.
The discounted VAT rate has since risen to 12.5%, and in April it will increase to its pre-pandemic 20% rate. Some publicans have called on the government to suspend the change. So far the government hasn’t indicated it will scrap the move. However, if the increase is scrapped, beer prices may not increase to the extent that is feared.
One such proponent of suspending the hike is Wetherspoons founder Tim Martin. He has previously called the 20% tax rate on pubs ‘unfair’. Martin says supermarkets have an unequal advantage when it comes to VAT. That’s because supermarkets pay no VAT on food, whereas pubs have to pay 20%.
Aside from VAT, some publicans have blamed the current ‘working from home’ trend as a reason why they are struggling. City Pub’s Clive Watson suggests that employees returning to the office will help both the pub industry and workers’ careers.
Watson explains: “I think we’ve got to remember about people going back to the office. It’s not just to help the hospitality industry; it’s to help everyone in the office.”
Are you concerned about the looming cost of living crisis? See our article offering three tips to help with the rising cost of living.
