Local pubs fear that the new tax hike on alcohol may “kill” business and drive away customers.
The price of a pint is expected to rise 5p to 10p as a result of the government’s budget plan, potentially leading to a loss of thousands of pounds in profits for Kingston pub owners.
Collin Turner, manager of The Spring Grove on 13 Bloomfield Road, Kingston, said: “When it comes to alcohol tax it’s the pubs that are suffering because they have to take on costs that other alcohol sellers don’t.
“It’s killing us.”
Chancellor George Osborne’s plan to increase beer tax by five per cent next week means that beer tax has risen 42 per cent since 2008.
Mr Turner added that the entire cost of the added tax will have to fall on the customer since profits on beer are already so low.
According to the British Beer and Pub Association, the tax on beer has risen 60 per cent since 2004 while pub owners have seen sales drop by 25 per cent in that time.
Nimral Patel, who acquired the No 88 Bar & Grill on London Road six months ago, believes the tax rise will hit his cash flow.
Mr Patel said: “In a recession if I increase my prices most likely the impact will be I will lose my customers, so I will have to suffer the impact. Now, in a recession, is that fair? Absolutely not.
“The five per cent increase in duty will affect me by £6,000 net profit a year, which I will have to absorb. Otherwise I will have the risk of losing my business.”
A recent industry report states the number of visits to local pubs has fallen by 19 per cent in the last year, closing the gap between beer sales at pubs and sales at supermarkets.
VAT rose 2.5 per cent last year to 20 per cent, cutting into alcohol revenues and making pubs more reliant on other items, such as food sales, to make up the difference.
The average new price of a pint of lager purchased from a pub, according to the British Beer and Pub Association, is now £3.33.
