The pub industry in South Tyneside, worth tens of millions of pounds, could take a hit if beer duty is raised as expected later this month, Britain’s Beer Alliance has warned.
Tax on beer is expected to rise by 3.4% in the Chancellor’s Autumn Budget.
With consumers increasingly opting for cheaper supermarket drinks and pub margins stretched, local establishments are braced for further struggles.
South Tyneside’s 119 pubs and bars employ 1,606 people directly, paying them £9.1million in wages, new analysis from Oxford Economics shows.
They also support another 321 jobs and £5.5million in wages indirectly, either through related jobs, like those in the supply chain, or through the money spent by people working in the pub industry.
In total, through salaries and spending power, the area’s pubs contribute £27million to the local and national economy, the analysis shows.
There are 2,091 pubs across the North East, adding £582million to the economy.
Across the UK, 3.2 pubs have closed on average every day over the last two years. If that trend continues, Britain’s Beer Alliance, an umbrella organisation for major brewers and pub companies, says one in ten pubs nationwide could close within five years.
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It would mean a significant loss to the estimated £18billion pub industry, which supports around 800,000 jobs.
A survey conducted by the organisation shows that more than a third of people would reconsider a trip to the pub if beer prices increased.
It also showed that a decrease in pubs could cause more than just financial loss, with 77% saying that they go to the pub as a place to relax and unwind, and two in five saying it acts a social hub.
David Cunningham, programme director of Britain’s Beer Alliance, said: “Pubs are the heart and soul of our culture and communities, they support many jobs, contribute significantly to the economy and are dear to people’s hearts right across the country.
“Pubs already face a range of tax pressures and if the Chancellor raises beer duty in line with Retail Price Index inflation as planned on October 29, pubs will feel the pinch even more.
“Seven in every 10 alcoholic drinks sold in a pub is beer, so it’s easy to see how a small tax increase adds up over a year.
“Based on current closure rates, we estimate that within five years more than one in 10 pubs in the UK will have closed for good, costing thousands of jobs. This will have a devastating effect on communities up and down the UK.”
Altogether, the local pub, brewery and beer trade in South Tyneside adds £30million to the economy, according to the Oxford Economics analysis.