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Brewer Young’s will raise prices by 3.5 per cent following Chancellor Rachel Reeves’ plan to raise business tax.
This move will add about 20p to the price of a London pint, which was about £6.50. A pint in the rest of the UK will be around 17p more.
A spokesman said the company raises prices every year and this time it had to offset the increase in the National Living Wage, alcohol duty and the additional cost of National Insurance contributions.
Mrs Reeves said in the Budget last year that she would increase employers’ National Insurance contributions in a bid to raise £22bn for the Treasury.
Simon Dodd, chief executive of Young’s, said: “Looking ahead, while we remain aware of the barriers facing consumers and the wider issues our industry will face due to increases in National Insurance contributions and the National Living Wage, our business is in excellent condition, and we continue to be optimistic about the year ahead.”
Fuller’s chief executive Simon Emeny warned in November that the price of beer in its pubs and hotels would rise by 10p.
Mr Emeny’s concerns were echoed by Tim Martin, the boss of rival chain Wetherspoon’s, who said after Ms Reeves’ budget that he and his rivals would have to raise prices.
Trade body Hospitality UK said NI and the increase in the minimum wage would add £2,500 to the cost of employing permanent staff for its members each year.
According to the Office for National Statistics, a pint of draft lager rose from an average of 92p in February 1987 to £4.82 in December last year.
This growth is far faster than normal inflation. If the price of a pint had followed regular CPI inflation since 1987, it would cost £2.61 today.
One of the biggest price jumps followed the corona virus. In March 2020, a pint cost just £3.75.
But since then, the price of fuel has skyrocketed, making brewing and moving beer far more expensive.
It has also made it more expensive to heat pubs and raised the cost of labor as workers demand higher pay to ease their costs.
In addition to the 20 per cent VAT, drinkers pay duty which costs around 46p per litre, depending on the strength.
Draft beer is charged at a slightly lower rate than wine and spirits, while cider is less flat, with about half the cost of draft beer for flat cider.
Campaigners have proposed simplifying the alcohol tax scheme to prevent cider from being more attractive to troubled people.