Bristol’s pints may not be the priciest in the UK, but they can certainly set you back a fair bit nowadays. Because of this, many people now venture to supermarkets and other places for bargain booze – but it’s nothing like heading for a drink at your local pub or bar.
The hospitality industry has taken a huge hit in recent years, following both the Covid-19 pandemic and the rising cost of living crisis.
Earlier in the year BristolLive reported how some of the local pub, bar and nightclub owners were feeling about the industry ahead of the October budget, which was just a couple of months away from being released at the time.
Julian McLauchlan, the owner of seven pubs in the city – including The Farm in St Werburghs, The Cadbury in Montpelier, The Stag & Hounds in Old Market, and The George & Dragon in Redfield – told BristolLive back in August: “All of our costs have risen. Everything’s gone up and you cannot put the prices up to match it. So at some point you’ve got to take a hit and just take less profit. That probably only stacks up if you’re really busy.
“There was a little moment when the Bank of England base rate went down and it probably doesn’t make a huge difference, but it was a little glimmer of hope. The sun was out, the base rate had gone down and people just had a little moment of feeling things might be better, but now it’s that doom and gloom again.
“There’s a bit of an old adage about pubs fighting each other for customers, which is partly true, but really we’re fighting people’s settees and the fantastic amount of things on TV, and really good beer that’s cheap at supermarkets. I know the last government started this, but I’d like to see the playing field levelled a bit where, if you’re running a pub and you’re on the high street, you shouldn’t be paying anywhere near the sort of tax of Tesco or somewhere like that.”
In the Autumn Budget it was announced that some changes would be made to alcohol duty in the Budget, which results in a small reduction. Here’s everything you need to know about the change:
How much will the changes to alcohol duty save me – and on what?
The changes to alcohol duty, while positive, only apply to drinks on draught. Chancellor Rachel Reeves announced a 1.7 per cent reduction in rates of alcohol tax for such drinks served in hospitality venues. In plain English, this basically means that it will cost you around one pence less.
In her statement, Reeves told MPs: “Nearly two thirds of alcoholic drinks sold in pubs are served on draught. So today, instead of uprating these products in line with inflation, I am cutting draught by 1.7 per cent, which means a penny off a pint in the pub.”
Other alcoholic drinks, including wine, gin, and whisky, did not see a reduction and, instead, are the subjects of retail price inflation (RPI), which averages at an increase of around 2.7 per cent. This has not been well received by those in the industry.
When will these changes come into effect?
The changes to alcohol duty will come in from February 2025.
What did Bristol pub and bar owners have to say about the changes?
Following the October Budget’s announcement, BristolLive spoke again to Bristol pub owner Julian McLauchlan, who shared his thoughts on alcohol duty changes. He said: “It’s a bit of ‘icing’ for customers, but of course a lot of people wait until the Budget to put up their prices. So people expect beer to get 1p cheaper which it never does.
“Actually a lot of people need to put their prices up now because they were waiting for the Budget to see what was going to happen. The alcohol duty, I’d say, generally doesn’t make any difference, really.”
In terms of other things of relevance to the industry in the Budget, Julian added: “There was a 75 per cent discount on business rates. We were paying 25 per cent and now we’re paying 60 per cent, and I think quite a lot of people are expecting the 75 per cent discount to get held.
“Although it sounded good on paper, what it actually meant was somewhere around a 140 per cent increase on the business rates. The minimum wage – I’m not against it going up but because it’s above inflation people need to understand that that’ll have a knock-on effect to prices because if inflation, for instance, is at two-and-a-half per cent and the minimum wage went up to 6.7 per cent – that is an extra cost for people. It’s a big increase on your wage board that you weren’t expecting.
“The worst part of the Budget for me, however, was the employer National Insurance contributions, because not only did it go up by 1.2 per cent which I think, in fairness, probably people were expecting, but the threshold where it kicks in was lowered from £9,200 to about £5,000. So for every employee that you have working above 17 hours a week, they cost you an extra £600 a year.
“For small single operator pubs, it perhaps won’t make a difference, but definitely for bigger pubs – and pubs that have multiple sites and things like that – once you start getting into 30, 40, 50 staff, it’s a pretty big increase, as you can imagine. Everybody I’ve spoken to in big business and small business seems to think it’s not a budget for growth. And I totally agree.
“We’re trying to take on two apprentices and now you have to think a bit more carefully about that, as that’s gotten more expensive as well. We’re not the smallest business but I think now everyone does their taxes online, why is everyone paying the same? Why can’t we have lots of bands where people pay different amounts?
“I’m fully behind a progressive tax system but this feels like it’s been a bit disingenuous and it’s going to hit people at the bottom more than they think. People think about the minimum wage pay rise, but because they’re not changing the tax bands until 2028 for people, everybody will pay more tax every year anyway, on their personal tax.”