Beer lovers in the UK may soon face higher costs as a result of the Labour Government’s Autumn Budget.
Simon Dodd, chief executive of Young’s, one of the country’s largest pub chains, announced that the price of a pint could rise by as much as 20p due to increased costs stemming from tax changes.
The rise in employer National Insurance contributions (NICs) is a key factor, requiring businesses to pay more taxes on workers’ wages starting in April.
Hospitality leaders, including Mr Dodd, warn that this will inevitably lead to price increases for consumers.
The Young’s boss revealed that a pint priced at £6.30 in London could jump to £6.50 as a result of the hike.
He said: “We’ll mitigate as much as we can of the NI contribution. We’ll do that through efficiency, we’ll do that through investing in our pubs. But there will be some price passed on to the consumer.”
Despite these challenges, Young’s reported strong performance over the festive season, with like-for-like sales rising 10.5% across Christmas Eve, Christmas Day, and Boxing Day compared to the previous year.
Young’s is not alone in cautioning about rising prices. Mitchells & Butlers (M&B), the owner of All Bar One and Toby Carvery, has indicated that its pints may increase by 10p to 15p in price due to higher NICs and minimum wage expenses.
CEO Phil Urban stated the NIC hike alone adds around £23 million annually to their costs.
Fuller’s boss Simon Emeny similarly criticised the tax increase, calling it “counterproductive to growth” and harmful to youth employment. Fuller’s hotels and pubs have already raised beer prices by 10p to offset costs.
Meanwhile, Tim Martin, chairman of Wetherspoons, echoed concerns, saying cost inflation has surged again due to the budget.
He said: “All hospitality businesses, we believe, plan to increase prices as a result.”
The hospitality sector isn’t the only industry feeling the pinch. Retail giant Next announced a 1% price increase and plans to introduce self-service checkouts to cut staffing costs.
Bakery chain Greggs has already upped prices on items like its iconic sausage rolls.
