July 28, 2008
Pub Pints Lose Their Froth but Shop Sales Keep on Rising
By Josie Clarke
Beer sales have fallen sharply since last year, according to figures released today.Total beer sales are down 4.5 per cent compared with the same quarter last year, while beer sales in pubs are down 10.6 per cent, according to the UK Quarterly Beer Barometer by the British Beer and Pub Association (BBPA).
In total 107 million fewer pints were sold in April to June this year compared with the same period last year - a fall of 1.2 million pints a day. Beer sales in pubs, bars and restaurants fell by 144 million pints - down 1.6 million pints a day.
The BBPA said the figures added weight to concerns over pub closures, the impact of rising prices and shrinking consumer confidence.
It estimated the fall in sales had led to the Treasury collecting pounds 88 million less in beer duty and VAT than in the same period last year.
However sales in supermarkets and shops had continued to rise, with a 3.8 per cent increase on the same quarter last year.
Over the first half of 2008 beer sales were down by 2.9 per cent compared with the same period in 2007, while total beer sales in 2007 were 3.9 per cent down on sales in 2006.
BBPA chief executive Rob Hayward said: "Beer sales are on the slide and the tax increase in the Budget has made it worse.
"This is hitting Britain's brewers and pubs hard. It's also creating a large hole in the Chancellor's pocket with the Treasury's tax take also down. This must call into question the Government's planned beer tax escalator.
Where's the logic in taxing more when you're taking less?
"With around one million jobs reliant on the trade, the loss of 1.6 million pints a day is having a serious impact, not just on the sector itself, but on the UK economy as a whole.
"Beer sales in pubs are now at their lowest level since the Great Depression of the 1930s - down seven million pints a day from the height of the market in 1979.
"We need a change of approach from the Government. Brewing is a major industry, beer our national drink and pubs a treasured part of our national culture.
"Yet with further duty increases planned the Treasury continues to see the brewing industry as a cash cow to be milked in future budgets.
These falling tax revenues show that it's time for a rethink."
On Saturday The Birmingham Post reported how Birmingham pub group Mitchells & Butlers (MAB) had seen a minimal 10-week drop in beer sales and increased market share as cash-strapped customers opt for pub meals.
The company, which also runs pub chains All Bar One and O'Neills, saw an increase in like-for-like sales of 1.1 per cent in the 10 weeks to July 19, with food outlet sales on a same-outlet basis ahead by 5.1 per cent on a year earlier.
M&B pointed to "significant market share gains" during the period, saying its value formats such as Pub & Carvery, where the average main meal price is pounds 3.96, and Sizzling Pub Co, which has an average price of pounds 4.94, gave "particularly powerful" performances.
The group's Vintage Inns and Premium Country Dining formats also saw strong growth. The company said its decline in drink sales had been limited to 0.2 per cent in the 10-week period.
M&B said its "robust trading performance" had generated strong operating cash inflow and added it had realised pounds 82 million in proceeds from disposals, including pounds 11 million from SCPD, M&B's property development unit.
But the group said it expected market conditions to remain challenging amid weakening consumer spending.
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