- Pubs welcome overhaul of chancellor’s liquor fee and new draft rate
- Extension in business rate relief Welcome relief for hospitality and leisure
- Despite measures, industry seeks more support from Treasury
After a year and a half of hardship, English pubs will raise a toast to the chancellor today when he slashed trade rates and simplified alcohol fees to encourage punters back to pubs.
A total of 358,254 hospitality, retail and leisure complexes in England have received £17.16 billion in rate relief since the start of the pandemic, according to Atlus Group.
The measures were due to expire next year, but Rishi Sunak today announced a one-year 50 percent cut, worth 1.7 billion pounds.
Pub welcomes chancellor Rishi Sunak’s overhaul of liquor fee system
Elsewhere, pubs will welcome ‘game-changer’ reforms in liquor fees, which will see a new, lower rate of charge on draft beer and cider.
Despite a raft of support measures, the industry is still grappling with the impact of the lockdown and is calling on the Chancellor to do more.
Liquor duty reform a ‘game changer’
The T-Total chancellor spent a lot of time outlining a complete overhaul of the alcohol duty, along with a tax cut on some drinks.
The new rules, which will go into effect in 2023, are a “radical simplification” of the UK’s system of alcohol duty, which Sunak described as “outdated, complex and full of historical inconsistencies”.
How much alcohol is in the drink will be taxed, which reduces the rates paid from 15 to six.
Along with this is ‘Draft Relief’, a new, reduced rate of duty on draft beer and cider that will knock 3p off a pint.
As the share prices of Weatherspoon and Heineken rose higher, the reforms were also warmly welcomed by the pub and alcohol businesses.
Todd Hibbert, manager of the Bank of Friendship, an independent pub in Highbury, north London, said: ‘The fee cuts are good news for everyone involved in the hospitality trade, and for brewers especially with low ABV beers. Will encourage innovation, which will help the development of the low and no-alcohol sector and responsible drinking.
‘Hopefully this will be the start of more support from the Treasury as many independent pubs are still getting back on their feet after the pandemic.’
The Campaign for Real Ale, which has long campaigned for alcohol duty reforms, hailed the new draft rate as a ‘game changer for cask beer drinkers, cider and parry drinkers and Great British locals’.
British pubs have been hit hard by the pandemic as they were forced to close shop in three lockdowns
‘CAMRA has previously conducted research showing that a draft beer fee rate can pull consumption in pubs and social clubs away from the closed trade, thereby boosting pub and local economies.’
‘We hope that pubs and producers will ensure that drinkers see the impact of this revolutionary policy at the cost of their pints, encouraging them to return to their local people.’
However, for Paul Jones, managing director and owner of Cloudwater Brew Company, the budget did little to help small craft brewers.
‘These measures seem like they reward people with well-established businesses that have been profitable for decades, if not hundreds of years. I don’t see what they do to level the playing field,’ he said This is money.
‘To us it’s as if we’re paying growth, jobs, revenue in taxes… and we’ve been overlooked.
‘The smallest and least profitable industry is craft, if we get any profit from it’ [today’s] Remedy… The earliest we are going to see it financially is in April 2023.
‘There will be immense pressure on the large number of craft breweries … we are faced with another waiting game. This package squeezes out the tiniest and most understatedly vibrant, progressive and innovative part of British beer today.’
Elsewhere, the English wine industry was happy to receive a special mention in today’s budget as the craze promised to cut taxes on sparkling wines like Prosecco.
Andrew Carter, chief executive of English winemaker Chapel Downs, said: ‘The rescued duty will enable the industry to create jobs, support families and bring even more young talent to this exciting, developing region as it recovers from the pandemic. ‘
‘VC’s patronage will make us more competitive against our worldwide competitors and this change will enable us to reinvest in our business and grow at a faster pace.
‘Chapel Down, along with the wider English wine industry, will this week raise a toast to the chancellor for his support.’
‘Devil in detail’ for business rates
The year-long reduction in business rates after months of lobbying would be another welcome relief for British pubs and the wider hospitality sector.
The chancellor said 400,000 retail, hospitality and leisure properties would be eligible for temporary relief next year, although its eligibility criteria have not yet been set.
Businesses will get up to 50 percent discount on their bill, subject to a cash limit of £110,000 per business and will be applicable in 2022–23 until a revaluation in 2023.
The government will also freeze the multiplier of business rates which will keep the small business and standard multiplier at 49.9p and 51.2p, respectively, rather than rising to 51.4p and 52.7p respectively.
It says the move will save businesses £4.6bn over the next five years.
Kate Nicholls, head of trade body UK Hospitality, said: “We very much welcome the chancellor’s move to provide 50 per cent business rate relief for the hospitality and leisure sector for the next fiscal year.”
‘The devil will be in the expansion, however, we are curious to know to what extent this will benefit businesses.’