New data from the British Beer and Pub Association (BBPA) reveals the dramatic impact of the pandemic on licensed premises in 2021. Despite an improvement, pub beer sales were still down 38% last year against pre-pandemic levels. The Association today reveals that the on-trade lost £5.7 billion of revenue from beer sales alone in 2021 – equivalent to 1.4 billion pints. Pubs accounted for 1.1 billion of lost pints, or £4.5 billion in revenue.
Although stark, the figures are an improvement from 2020 where trading was down 55% compared with 2019. BBPA analysis of HMRC tax receipts confirms a significant shift in consumer consumption patterns. Between March 2020 and October 2021, beer receipts dropped 11% while receipts for wine and spirits rose 8% and 13%. The BBPA attributes the shift to periods of restricted pub trading, the location where beer is by far the most popular drink, along with a rise in at-home drinking.
The findings come as Treasury Ministers begin considering responses to a consultation on simplifying the alcohol duty system, notably with the intention to link duty rates to the alcoholic strength of different categories of drinks. The increase in consumption of wine and spirits, which are naturally higher ABV, at home aligns with the Treasury’s ambition to incentivise the consumption of lower strength products, the BBPA argues.
In response to the figures, the BBPA is calling for:
- A reduction to beer duty closer to the lower rate proposed for cider;
- An extension to the proposed relief for draught beer sold in pubs to include smaller kegs below 40L, which would support the sectors recovery and ensure all pubs benefit from the proposal;
- An increase in the threshold to define lower-strength beers from 3.4% ABV to 3.5% ABV;
- Additional help to support the on-trade recovery, including reform to business rates and an extension to the reduced rate (12.5%) of VAT for hospitality.
Emma McClarkin, Chief Executive of the British Beer and Pub Association said: “Every unsold pint is a stark reminder of the dislocating effect COVID restrictions had on our sector and the communities our pubs sit at the heart of.
“Our analysis showing falling beer consumption supports the Treasury’s stated objective to incentivise lower-strength products and differentiate beer from stronger wine and spirts as part of planned reforms to the alcohol duty system.
“We must again ask Ministers to go further and support our recovery by continuing to reduce the punitive tax burden on our sector to ensure the sustainability of brewing and pubs.”