Increased duty on alcohol will ‘cripple’ hospitality businesses

Rebecca Black, PA

Increased duties on alcohol are set to “cripple” hospitality businesses, it has been warned.

The increases to a number of drinks, set out in the Spring Budget, are set to come into force on Tuesday.

Hospitality Ulster said the “biggest single alcohol duty increase in almost 50 years” has been exacerbated by the new way duty on alcohol will be calculated.

The new method will measure the alcohol content in a drink, and some products that previously had a low duty rate will see greater increases.

The Treasury said the historic duty changes mean that the duty paid on drinks on tap in pubs will be up to 11p lower than at the supermarket, and described the changes as designed to help pubs compete on a level playing field with supermarkets.

Colin Neill, chief executive, Hospitality Ulster said businesses are already under pressure in terms of inflation, rates, National Insurance contributions and insurance.

He said they will be forced to raise the prices they charge for alcohol.

“The immediate future remains challenging, and it is vital that we ensure our valued customers understand the price increases are down to the government – not hospitality businesses,” he said.

“This has left hospitality businesses, who are fighting to break even, no choice but to pass on the significant duty increases to customers.

“This is heaping misery on customers and will damage hospitality businesses at the same time.”

He said taking into account overheads for labour and bills, a publican is likely to be making around 50p on a pint.

“That’s just not sustainable at a time when costs are rising all around us,” he said.

“The hospitality sector is one of the highest taxed and undervalued sectors in the UK, but we will continue to work in partnership with UK Hospitality to press the British Government to recognise the importance of the industry.”