UK beer consumption slides in H1 - British Beer & Pub Association

UK beer consumption slides in H1 - British Beer & Pub Association

Beer sales in the UK have continued to sink to new lows in the first half of 2011, with the British Beer & Pub Association pointing the blame at higher tax.

Volume sales fell by 7.3% for the six months to the end of June, the British Beer & Pub Association (BBPA) said today (26 July). In the second quarter, volumes slid by 10%, with supermarket sales down by 15% and on-trade volumes down by 4.5%.

An extra public holiday and good weather in April and May failed to offset a 7% real-terms increase in duty tax and the lack of a major football tournament this summer. "The Royal Wedding gave a welcome boost to this quarter’s beer sales, but beer tax rises are now hitting our brewers hard and undermining recovery," said the BBPA's CEO, Brigid Simmonds.

The figures mark another low for the UK beer market. Sales in the first six months of 2011 were 12.27m barrels, which is the smallest total for the first half of any calendar year in BBPA published records, dating back to 1997.

As well as duty tax, which has risen by around a third on beer and wine in the last three years, the BBPA also criticised the Government's blanket increase in value added tax, from 17.5% to 20%, in January this year.

Prior to the VAT increase, analyst group Oxford Economics reported to the BBPA that the move would likely lead to a sales drop of 649,000 barrels of beer in the UK's current fiscal year. "The period so far indicates that these falls are in line with these predictions, even after putting aside the World Cup issues," a BBPA spokesperson told just-drinks. 

By contrast, many premium beers, from bottled lager to ale, have outperformed the market. For 2010, Anheuser-Busch InBev reported Budweiser volumes up by 36% in the UK, albeit off a small base.