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  • BBPA comments on inflation hitting six-month high

    19 September 2018

    The British Beer and Pub Association (BBPA) has commented on UK inflation rates rising to the highest level in six months, with RPI and CPI rising to 3.5% and 2.7% in August respectively. Commenting on the rise of inflation, BBPA Chief Executive Brigid Simmonds said: “This significant rise in inflation is worrying news for pubs and brewers alike. Beer duty is linked to RPI, which rose by 3.5% in August, meaning pubs and brewers face a steep hike in taxes just like under the dreaded beer duty escalator. As a consequence, Britain’s Brewers could see an increase of over £100 million in tax in the next Budget. The misery for pubs would be compounded by CPI increases in business rates. “£1 in every £3 spent in pubs already goes to the taxman and under the beer duty escalator, which saw sustained increases to beer tax, 5,000 pubs closed and 58,000 jobs were lost. It’s clear that action is needed by the Government to alleviate these cost pressures pubs face, else we risk losing them forever. This is why we are backing the campaign longlivethelocal.pub to call on the Government to cut beer tax and support local pubs.”

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  • BBPA comments on Migration Advisory Committee’s report on the impact of EEA migration in the UK

    19 September 2018

    The British Beer and Pub Association (BBPA) has responded to the publication of the Migration Advisory Committee’s (MAC) report on the impact of EEA migration in the UK. Commenting on the report, BBPA Chief Executive Brigid Simmonds said: “We broadly welcome the MAC report and the evidence it provides that migrant workers play an important role in the UK economy, without having a major effect on the employment of UK workers. Increased productivity is vital to the economy and the MAC report acknowledges this, as does the Government’s Industrial Strategy. With this in mind, we’d urge the Government to support the proposed Tourism Sector Deal and its emphasis on skills, which the BBPA is prepared to back with financial contributions if the Government supports it. “We have previously called for a review of the Tier system and welcome the proposal from the MAC that the Tier 2 visa bracket be expanded to cover a wider range of occupations. However, we have serious concerns about retaining the salary cap of £30,000 as pub chefs, who are very much in short supply within our sector, would in many cases not meet the cap. Nonetheless, the proposal to reduce the qualifications for the Tier 2 visa bracket from RQF6 to RQF3, which would consider the experience offered by pub chefs, rather than just qualifications, is most welcome. “It is good that the MAC report has recommended that the administrative burden of the Tier system be reviewed for SMEs. No small pub could take on the current sponsorship requirements as they stand, let alone the cost and bureaucracy that currently goes with it. “Whilst broadly welcoming the recommendations of this latest MAC report, we still feel that the MAC does not recognise the important role of the hospitality industry in the UK and the serious issues that migration caps will bring to the sector. On average, as many as 24% of workers in pubs are from overseas – rising to as much as 80% in some urban areas – meaning that any cap which does not recognise the deficit in talent will cause hardship for pubs and could ultimately lead to more closures. This is why we continue to call for the extension of the Youth Mobility Scheme, which allows young people up to the age of 30 from a prescribed list of countries to work in the UK for up to two years. Considering some 42% of employees in pubs are under the age of 25, extending the Youth Mobility Scheme to the whole of the EU is most welcome, as has already been proposed in the Chequers Agreement. “We look forward to building on the MAC report in our discussions with the Government, but would urge more emphasis on the requirements for soft skills, which are so vital to the pub sector and contribute to the multi-faceted nature of our society and communities.”

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  • BBPA publishes new cost benchmarking data for tenants and lessees

    08 August 2018

    The British Beer & Pub Association (BBPA) has today published the latest edition of its operating cost guide for tenants and lessees. The data is intended to help those wishing to take on a tenanted or leased pub business to be as well informed as possible about the current costs involved in running a pub. The BBPA’s guide provides valuable information for tenants and lessees on typical operating costs in the pub sector. The guide gives existing tenants and lessees the opportunity to benchmark their own business and compare their own costs against these published industry norms. Updates included in this year’s guide are: Pay-TV costs for all pub models Live music costs for all pub models A town/country model which brings the total number of pub models featured in the guide to nine The guide shows the average cost of running a leased and tenanted pub over a range of pub models based on turnover and business types. It covers a wide range of pubs, from those with little in the way of food sales, to those that are largely food-led, and takes account of the significant variations that exist in the cost base, even within those pubs that are broadly in the same category. As in previous editions, the guide’s input data and sources change each year, so the information should not be used to determine trends from year to year. The guide also makes clear that all pubs are unique and that actual costs incurred will be dependent on the different aims and styles of the business according to the location, the market and the skills of the tenant or lessee. As well as providing average costs, the guide also includes the minimum and maximum operating costs, providing a range of scenarios across different types of business. BBPA Chief Executive Brigid Simmonds OBE said: “Whether you already run a pub or are thinking of taking one on, this new report is a must-read. It includes essential information on the current costs involved in running a Great British pub and can be downloaded – free of charge – from our website.” The full guide can be downloaded from the BBPA website here.

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  • BBPA responds to Home Affairs Committee report on migration

    31 July 2018

    The BBPA has today commented on the Home Affairs Committee’s report on migration, titled: “Policy options for future migration from the European Economic Area: Interim report.” Commenting on the report, Brigid Simmonds OBE, BBPA Chief Executive, said: “It is vitally important for the beer and pub sector that there is a clear focus on immigration policy and this is why we have previously welcomed the Government’s announcements on applications for settled status, as 24% of all employees across the BBPA’s membership come from abroad, of which 17% are from the EU. “The BBPA shares the concerns of the Home Affairs Committee however, regarding the lack of debate on policy options to date and that as soon as is practical after the Migration Advisory Committee reports, the Government must bring forward detailed immigration policy options for consultation. It is vital that businesses are able to access the skills and people required to support economic growth and that there is greater certainty for this. As part of this, the BBPA also supports an overhaul of the UK’s arrangements for non-EU nationals. “As recognised by the Home Affairs Committee, there is now a greater understanding by the electorate of the benefits of overseas workers in the UK and the role they play. For brewing and pubs, this means there needs to be a review of the tier system. There is a real shortage for pubs when it comes to recruiting chefs, who would not qualify for tier two status. In this regard, it has been good to see the Government’s proposals that the Youth Mobility Scheme be extended to the EU as part of the recent announcements following the Chequers Summit.”

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  • Q2 Beer Barometer – Beer sales rise, but a cut in beer tax is still needed to help pubs, says BBPA

    30 July 2018

    Beer sales in the second quarter of 2018 were up 3.6% on the same period in 2017, according to the latest Beer Barometer sales data from the British Beer & Pub Association. The increase in sales of beer in Q2 2018 was driven by the off-trade (e.g. supermarkets), which saw beer sales go up by 7.7% on the same period in 2017. In comparison, the on-trade (e.g. pubs) did not see growth in beer sales in Q2 2018 – with sales of beer decreasing by 1.0% year-on-year instead. Despite this, the fall in on-trade sales in Q2 2018 was a significant improvement on Q2 beer sales from the last ten years, where the average fall in on-trade beer sales has been 3.7%. The improvement is due to the boost to pubs from good weather during Q2 2018, as well as the beginning of the FIFA World Cup and the continued positive effects of the beer duty freeze implemented by the Chancellor in November 2017. Although the FIFA World Cup is a welcome boost to pubs, it only comes around once every four years and so measures taken by the Chancellor to cut or freeze beer duty year-round are far more influential for the long-term sales of beer in pubs and pub viability. With the very real threat of a beer duty increase on the cards in the next Budget, the campaign “Long Live The Local” – from Britain’s Beer Alliance – has been launched, calling for a cut in beer tax to decrease the significant cost pressures pubs face and help give them a boost. Speaking on the Q2 Beer Barometer, Brigid Simmonds OBE, BBPA Chief Executive, said: “It’s certainly good to see that beer sales are doing better overall. There is a very real threat however that the Chancellor will increase beer tax again in the Budget later this year, which would be a huge backward step after so much progress has been made since he froze beer duty last year. We need further cuts in beer tax to help pubs and the great British brewing manufacturing industry.”  David Cunningham, Programme Director of Britain’s Beer Alliance, which is behind the “Long Live The Local” campaign, said: “The ‘Long Live The Local’ campaign celebrates the vital role pubs play in people’s lives and their communities. It also highlights the range of tax pressures that pubs face and encourages pub goers to go to their local and call on politicians to cut beer tax. “Pubs face an unprecedented range of tax pressures including beer duty, which means that £1 in every £3 spent in a pub goes to the taxman. This clearly is a factor behind declining beer sales in pubs, pub closures and job losses.” UK Quarterly Beer Barometer Q2 2018

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  • 2017 Market Insights

    Paul Oakley | 25 July 2018

    Forty-seven companies contributed to this year’s Annual Barrelage Survey, the industry’s definitive measure of the UK beer market. The headline result being that beer sales were 0.7% higher in 2017 compared to the previous year. As usual the tables and report are free to all members of the BBPA, if you would like to receive a copy then please contact me. But non-members don’t need to be too concerned - the report is available in our shop here. So just how much beer was sold? In total, Brits enjoyed over 7.75 billion pints of the nation’s favourite drink, that’s 21.2 million pints every single day. Or to put it another way 28.9 million kegs plus 4.9 million casks plus 3.2 billion cans plus 3.3 billion bottles. Or 1,762 Olympic swimming pools! So what insights can we gauge from the report? Here are three interesting insights that paint us a picture of the world of beer in 2017. Pubs are under increasing pressure The long term trend seeing people favour a beer at home over their local has continued. 53.1% of beer sold in the UK was sold through the off trade in 2017, the highest this figure has ever been. Of course there are many social factors driving this trend. The home is a very different place than it was in 2000 due to improvements in home technology. People also tend to have less leisure time than they used to, as well as the rise of social media which means you no longer need to leave your house to see friends. However, what is surely the biggest driver is the rapid increase in the price of a pint in pubs. In fact, in the last ten years, the price of beer in the on trade has increased by 28.6%. This compares with an increase of 8.5% in the off trade. Pub-specific cost pressures like business rates, which sees pubs pay an unfair burden of the total high street bill. As well as the National Living Wage and VAT means it looks likely that this worrying trend will continue into the future. Pubs are also reeling from crippling duty increases of over 42% between 2008 and 2012. Three cuts and a freeze had relieved some pressure on pubs since then but last year’s 3.9% hike has increased the challenge further. Draught Ale innovation Back in 2000 Nitro Keg Ale was the most popular style of keg ale with 42.2% market share. Fast forward to 2017, Nitro Keg Ale volumes have fallen 69.2%. Contrast this with Cask Ale which has been relatively resilient to market pressures over the same period and now comprises 57.9% of the market for draught ale. However, in 2017 it is Traditional Keg Ale which is the category in growth with volumes increasing by 9.6% last year. There is certainly a large appetite for draught ale currently and this “new wave” of keg beers is being driven by new tastes in the market but also through innovation by new and existing brewers. Changing tastes are always difficult to predict and it will be interesting to see if this continues in future years. The rise of No and Low Alcohol Beers No and Low Alcohol Beers have always been of interest to consumers and industry alike, however sales remained stagnant for a long time. Since 2013 we have observed an exponential rise in sales of these beers. In fact, in 2017 alone volumes increased by 25.9% while volumes have grown by a staggering 150% in the last four years. No and Low still only account for 0.5% of the market however so there is room for even more growth. Whether this trend is driven by demand for a healthier alternative or an improved supply of quality products through brewing innovations we welcome this interesting trend.

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