The Telegraph – Beer sales slump by largest amount in 14 years.
Britain is turning away from beer with 212 million fewer pints being sold in the last three months than the same period last year, new figures show.
The Publican’s Morning Advertiser – On-trade beer volumes fall 4.5%.
Press Association – Beer sales slump by almost 10%.
The above were headlines in the beer press yesterday following the release of new figures from the British Beer & Pub Association (BBPA). They show UK on-trade beer volumes fell 6% in the year to June 2011, with sales down 4.5% in Q2. The Royal wedding and decent weather in Q2 is credited with reducing the slowdown, although this was offset by the comparisons with the World Cup in Q2 2010.
The BBPA’s Quarterly Beer Barometer is based on data from their brewery members who account for 96% of beer brewed in the UK and it shows that overall beer volumes for the 12 months to June 2011 fell 7.1% and declined 9.8% in Q2 2011. The off-trade was hit harder by comparatives with the World Cup, with Q2 volumes down 15%. Across the full year, off-trade volumes fell 8.3%.
The figures show 2 billion pints were consumed in April, May and June 2011. This 9.8 per cent fall on the comparative period in 2010 is however, the biggest quarterly fall seen in Britain since 1997, when the trade body started collecting detailed data.
Nothing new in the figures here, because as everyone knows UK beer volumes have been in gradual decline since 1979; but it is the comment, the biggest quarterly fall seen in Britain since 1997, which concerns me. Just where will it all end?
The figures are staggering, the majority of these been taken from a submission to the Treasury, by way of written evidence, by the BBPA in March 2011.
1. The continuation of the beer duty escalator saw a 7.2% increase in beer duty in this year’s Budget. Beer duty has now risen by a staggering 52% since 2004 whereas beer duty revenues have only risen by 8%. .
2. Research from Oxford Economics and PricewaterhouseCoopers (PwC) has highlighted the diminishing returns from beer duty rises. The Treasury has over-estimated revenue from beer duty increases by hundreds of millions of pounds in the last few years.
3. A study undertaken by Oxford Economics prior to the 2011 Budget showed that the beer and pub sector supports almost ONE MILLION jobs across the UK. Oxford Economics calculated that a beer duty freeze in the March Budget would have saved over 10,000 jobs in 2011-12 alone.
4. For many brewers, beer duty accounts for around half of the total cost of sales. The combined UK operating profit for the four largest brewers (accounting for 75% of sales) has been negative since 2006 and for the brewing sector as a whole a mere penny per pint sold.
5. Beer accounts for over 60% of drink sales in pubs. Pubs are at the centre of hospitality and tourism in the UK. Hospitality is the UK’s fifth biggest employer. The average pub injects over £80,000 into the local economy.
6. Since 2004 beer sales in pubs is down by over 30% (or 5 million pints per day). One-fifth of the total UK beer market has disappeared in just six years. Pubs closed at a rate of around 30 per week in 2010.
7. Around 85% of beer sold in the UK is produced in the UK with a predominantly UK supply-chain. Britain’s beer and pub sector is a significant tax and GDP contributor. Beer sales generate over £7 billion in tax revenues and 400,000 direct jobs, including almost 20,000 in agriculture.
8. Rates of duty pass-through for beer were calculated in the Oxford Economics and (PwC) studies of the UK beer market which both found (using different datasets) that, on average, a 1p rise in duty led to a price increase of approximately 3p-3.5p in the on-trade but less than 1p (c.0.6p) in the off-trade.
9. A 2009 PwC study concluded that considering overall tax revenues from beer: “.the current duty rate is almost at the revenue-maximising level and any further significant increase would result in a reduction in the tax revenues obtained by the Government from the brewing industry”.
10. A duty freeze could have saved over 10,000 jobs in 2011/12 alone. The decline in duty revenue (£61 million) would have been more than offset by other tax revenues. Beer sales would decline by nearly 775,000 barrels less than will now be the case. Scrapping the beer duty escalator and freezing beer duty over the next three years would save over 27,000 jobs.
Back in 2009 on a visit to Harvey’s Brewery in Lewes, Sussex, David Cameron sampled a beer and it looked to me then as if it’d poison him; no such f…… luck. The photograph above only confirms my first thoughts of him and for sure I don’t trust a man who can’t sink a decent pint.
So David Cameron and Co. will you please now put your personal tastes aside, listen and see what you and your predecessors are doing and have done to Britain’s brewing industry and its pubs. Our industry is undergoing a transformation that threatens its very existence and could render it unrecognisable. If it continues it will also result in the loss of one of Britain’s most valuable assets – the pub.
