BrewDog calls for relief from government as sector faces £1b hit

BrewDog is calling on the government to offer more support for hospitality ahead of next week’s Budget, warning that the cumulative cost burden from energy bills, labour costs and tax hikes is threatening the viability of thousands of UK pubs and breweries.

BrewDog’s chief executive James Taylor warned that the hospitality sector must sell an extra 950,000 pints every hour to recoup the £1b in costs that the sector has been hit with over the past 12 months.

As well as being hit by rising National Living Wage and employer National Insurance contributions, BrewDog said inflationary pressures from poultry and other food items have also increased operating costs for pubs and bars.

The brewer and bar operator has also urged the Government to consider temporary VAT relief for hospitality to protect jobs and sustain local economies.

Taylor said: “In the past year alone, energy and utilities, wages, National Insurance contributions, raw materials, packaging and regulatory costs have all moved in the wrong direction. We estimate that, taken together, these cost increases have added more than £1b to the sector’s collective bill.

“The tax rises that came into effect in April, notably the increase in duty on non-draught beer and the scaling back of business rates relief for pubs, have made a tough trading environment even tougher. If the chancellor chooses to clobber the sector again in this Budget, many independent brewers and pub operators will simply not be able to withstand the pressure."

He added: "Other markets have already recognised the scale of the challenge. Both Germany and Ireland have announced or proposed VAT reductions for hospitality, with Ireland cutting VAT to help protect jobs and support recovery. The UK government should follow their lead. Britain’s brewing heritage is something to be proud of. With the right policy environment, this sector can be a powerhouse for jobs, growth and creativity.”