FDBusiness.com

British beer sales in the twelve months to June 2011 fell by 7.1% as the January VAT rise followed by a 7.2% beer duty in the recent Budget flattened the beneficial effect of the Royal Wedding.  In the second quarter of 2011, beer sales fell by 9.8% with sales in supermarkets and shops down 15% and pub sales down 4.5%, according to the British Beer and Pub Association’s latest UK Quarterly Beer Barometer – the industry survey of beer sales.

Pub sales in April and May were boosted due to the Royal Wedding/Bank Holidays and warmer weather but the cumulative impact of tax rises, equating to 10 p per pint in pubs, in Q2 severely dampened this positive impact. The BBPA also points out that this year’s comparator has been hit by the ‘World Cup effect’ which boosted sales in both pubs and supermarkets in Q2 last year.

“With last year’s sales figures benefiting from the World Cup effect, which has historically boosted sales, sustaining volumes was always a challenge,” points out Brigid Simmonds, chief executive of the British Beer and Pub Association. “The Royal Wedding gave a welcome boost to this quarter’s beer sales, but beer tax rises are now hitting our brewers hard and undermining recovery.”

She adds: “We warned the Chancellor that further beer tax rises would hinder job growth in our sector. Duty increases are fuelling inflation and stifling investment. Taxing beer fairly would create thousands of new jobs and substantial extra tax revenues at a time when we are all looking for private-sector led recovery.”

The British Beer & Pub Association is the UK’s leading organisation representing the brewing and pub sector. Its members account for 96% of the beer brewed in the UK and own nearly two-thirds of Britain’s 52,500 pubs.