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Pub Guide

Manchester Arms - St. Ives

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Opening Times

Issue 136 Autumn 2008

Download a copy of Opening Times 136 as a PDF file - 1.1 MB

ROCK BOTTOM SUPERMARKET PRICES AS BUDGET HITS PUBS

Chancellor Alistair Darling’s 4p a pint duty increase has hit pub beer prices hard as supermarkets appear to have taken the hit and the price differential between pubs and supermarkets continues to widen.

A survey by Huntingdonshire CAMRA has shown an average increase of 12p for a pint of real ale in local pubs since the budget hike, and in large chains of leased pubs the average increase found for standard cask bitters was as high as 25p a pint.

And as the government promises to take action on supermarket alcohol pricing, a Huntingdonshire CAMRA survey of local supermarkets in June 2008 has revealed average prices of as low as between 79p and 99p a pint for standard British-brewed lagers, and between 84p and £1.16 a pint for standard bitters.

supermarket prices

Average Supermarket price found in Huntingdonshire area, per pint

Although the budget increase was set at 4p a pint, this is added to the price of beer at the brewery gate. Each party along the supply chain will have wanted to maintain profit margins and this explains price rises of up to 10%.

Around 30% of the price of a pint goes to the Treasury because beer is liable for VAT at 17.5% as well as duty. For a 4% alcohol pint of beer sold in a pub for £2.45, the government takes 72p, the brewery’s total costs are 64p and retail costs are 67p. This leaves a surplus of 42p, some of which is re-invested in pub estates, for example.

CAMRA research indicates that 57 pubs are closing permanently every month as the price differential between pubs and supermarkets widens. Pubs provide a regulated environment for people to enjoy alcohol socially and responsibly. The mixed clientele found in the best community pubs has an uncanny knack of restraining unruly behaviour and, in conjunction with the watchful eye of the licensee, makes drinking in the pub a more controlled pursuit than unregulated consumption away from licensed premises.

More than forty MPs have recently backed an Early Day Motion urging the government to introducing a package of measures to tackle deep discounting of alcohol sales, introduce compulsory labelling for alcoholic drinks and limit point of sale promotions.

Meanwhile Health Secretary Alan Johnson has indicated that the government is prepared to confront supermarkets and take mandatory action on alcohol pricing and promotions.

Pubs provide a range of facilities that can be expected to be reflected in pub prices, but many will struggle in the face of supermarkets undercutting pub lager prices by up to £2.10 a pint.

Pubs are more than outlets for alcohol. They are the cornerstone of communities, places of friendship, support and fun. While this yawning chasm exists between supermarket and pub prices, CAMRA believes that unregulated drinking will continue and more pubs will bleed customers and die as cash-strapped customers consign themselves to drinking in front of the TV or on the streets.

CAMRA has said that although the beer tax hike was intended to curb binge drinking, it could have the opposite effect as supermarkets can afford to take the hit and their ‘rock-bottom’ prices are fuelling Britain’s binge-drinking culture. CAMRA believes that the government should ban the use of alcohol as loss leaders by supermarkets instead of continually heaping blame and extra costs on to pubs as a reaction to concerns about binge drinking.

Following the Chancellor’s budget speech in March, Mike Benner, Chief Executive of CAMRA said, ‘The Chancellor has failed to recognise that well-run community pubs are the solution to Britain’s binge drinking problems. This budget will do nothing to stop binge drinking, but it will lead to pub closures on a huge scale, widen the gap between supermarket and pub prices and encourage smuggling and cross-border shopping. It’s a great big nail whacked ruthlessly into the coffin of the British pub.

‘Pubs are defined as local services yet this tax rise alongside other market pressures will accelerate closures to unprecedented levels. The budget shows a disregard for our national drink and for the 15 million people who enjoy it responsibly.’