Marston's has become latest brewer and pub operator to paint a gloomy picture of the UK on-trade, but has reported a rise in full-year ale volumes.

Own-brewed Ale volumes grew 5% during the 12 months ended 4 October, Marston's said in a trading update today (15 October). Premium ale volumes grew 17%, boosted by the brewer's acquisition of Ringwood and Wychwood Brewery.

Marston's said group turnover was 2% of last year and that its performance was in-line with expectations.

This glimmer of good news was overcast by the brewer's warnings of ongoing cost rises, weakening consumer confidence in the second quarter and a slide from on to off-trade in the UK, however.

On-trade beer volumes across the UK market fell 10% during the year, Marston's said, blaming poor summer weather and also price pressures.

It said: "Recently introduced legislation and increases in taxation have increased the commercial pressures on pub operators and their tenants and have contributed to an increasing alcohol price differential between pubs and the off-trade. In particular, this has disadvantaged many tenants in comparison to larger retailers."

The brewer added that costs relating to employment, food, energy and brewing raw materials are expected to increase by around £12m next year, in addition to any duty rises in the UK 2009 Budget.

It said, however, that weaker sales and margin pressures have been mitigated by cost savings initiatives in the last year. "Although we remain cautious about the immediate trading outlook we believe we are relatively well positioned for the current environment," said CEO Ralph Findlay.