UK: Ministers to meet with ailing beer, pub sector
Government ministers are to hold a series of meetings with leaders from the UK beer and pub industry, as closures mount and sales head south.
Leaders of the British Beer and Pub Association (BBPA) will meet with Treasury minister Angela Eagle next week to "highlight the plight of the industry", A BBPA spokesperson told just-drinks today (12 December).
The industry body has also secured a meeting with business secretary and former European trade commissioner Lord Mandelson, provisionally set to take place in the new year.
Mounting pub closures, set at an average five per day by the BBPA, are rising up the political agenda in the UK. Beer sales are at their lowest level since the 1930s.
Industry leaders blame the government for increasing the pressure on firms with tax rises. Chancellor Alistair Darling announced an 8% duty tax rise in his pre-Budget report last month, following a previous duty rise earlier in the year.
"This is the last thing we need," the BBPA spokesperson said. Value added tax has been reduced in the UK from 17.5% to 15%, as part of efforts to stimulate the economy, but this is set to rise again in 2010.
This week, Liberal Democrat opposition MP Greg Mulholland called for ministers to review the relationship, known as the 'tie', between pub companies and licensees. He said many licensees earned below GBP20,000 per year, less than the national minimum wage if attributed to a couple.
"Unless the tie operates on a fairer basis, more pubs up and down the country will be forced to close their doors," said Mulholland.
The BBPA has distanced itself from Mulholland's remarks, stating that freeholdings are as badly affected as pubs tied to companies.
Confidence across the UK beer sector and its 57,000 pubs received a boost this week after Marston's announced it had secured an extension to its bank facility with its core lenders.
Marston's net profit for the 53 weeks ended 4 October fell to GBP62m, down from GBP82m in 2007, as higher duty tax, falling on-trade beer sales and a weakening economy took their toll.
Rival Greene King also reported a fall in profit, for the 24 weeks ended 19 October, but both beer and pub groups held their shareholder dividends for the respective periods.
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