Brewer warns on beer price

The price of a pint could rise and more pubs could close because sales will not benefit from a reduction in VAT, an independent brewer in Worcestershire claims.

Jim Wonders, of the Cannon Royall Brewery at the Fruiterers' Arm in Uphampton, near Stourport, has appealed for help from Mid-Worcestershire MP Peter Luff.

Beers from the Canon Royall Brewery have been featured in the bar at Westminster, and Mr Wonders has now called for an urgent review of the Government's duty on beer.

Mr Wonders said "competitive pressure from supermarkets and the decline in beer sales means small brewers in particular cannot afford to pass on price increases". He believes that the effect could see local pubs going the same way as the 2,500 post offices which have closed across the country.

Mr Luff has now added his backing for brewers. He said: "We should be helping the small, responsible brewers and local pubs, not penalising them.

"Why beer was one of the products singled out as not being able to benefit from the modest reduction in VAT, I do not know."

In his pre-budget report Chancellor Alistair Darling announced there would be an eight per cent rise in the tax, meaning duty has now risen 17 per cent this year. "Brewers and publicans have warned that their costs could soar and said that the price of a print will go up," Mr Luff added.

Julian Grocock, chief executive of the Society of Independent Brewers, said: "It is entirely predictable.

"The Chancellor instantaneously balanced the VAT cut by the increase in duty.

"He obviously thinks it's worthwhile to reduce VAT to stimulate the economy and help small businesses in every area except for fuel, tobacco and alcohol. Effectively, he has taken no action whatsoever for our benefit.

"All this trumpeting about doing something to help small businesses – and why is the brewing industry not included?

"We are just as much in need of stimulus as everyone else."

Mike Benner, chief executive of the Campaign for Real Ale (Camra), said: "The Chancellor's refusal to allow beer drinkers to benefit from a VAT reduction means that 7,500 pubs could close by the end of 2012.

"The failure to support pubs will undermine community life, ruin livelihoods and deprive people of an affordable night out at a local pub."