Not had a proper look at the Budget that was announced yesterday but I am aware that 4p is being put on a pint. Will be interested in the motivation behind this? Reducing the consumption of beer in pubs or to raise more revenue?
Will also be interested to understand how price elastic beer is and whether it will lead to more pubs closing down. Pubs have been hit hard by the Smoking Ban, after all.
Advertisements
March 16, 2008 at 11:26 am
Sorry, the last comment was sent too early?
Duty of 4p is added to the landlords beer costs.
Duty is then subject to VAT (double tax or tax on tax).
4p duty increase on top of massive increases in beer cost (mainly due to fuel prices) means that the net effect of the budget is
4p duty cost means to maintain gross profit rate the land lord will typically double this to 8p, then has to add VAT… that’s about 10p!
More pubs will close. This is NOT a good thing. Many people only get to meet other people in their local community at this venue.