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Budget Update

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Budget Update

The chancellor yesterday said the alcohol duty escalator – which adds inflation plus 2% to the price – would be abolished for beer completely.

The brewing industry and real ale drinkers’ group Camra welcomed the news.

However, news that the escalator will remain for wine and spirits was condemned strongly by these industries and in future beer duty will still rise by inflation.

The Details;

Beers & Lagers fall by 1p per pint

Spirits rise by 36p per 70cl bottle at 40% ABV 2p per measure including vat

A bottle of wine goes up by 9p or 11p including VAT

Cider up by 1p plus vat so 2p per pint

Single serve wine +3p per bottle

Cigarettes +26p per packet

What do you do?

For the average pub / social club the rising and falling rates may cancel each other out but for sites where wines and spirits make up a large percentage of the sales mix prices need to rise.  I know of a lot of sites that are yet to increase prices following the brewers rises, this tactic is foolhardy.  Don’t forget all spirit and soft drink manufacturers have crept prices up and wholesalers have added their margin.  Utility bills also continue to rise and like it or not someone has to pay.

Remember, price is only one consideration when customers decide where to drink, a whole host of other reasons factor into whether they come to your establishment.  They will not come if you don’t make enough profit to re-invest in the site and ‘keep the kettle boiling’ with regular small changes to your business.

As always, please give us a call or email richard@rcmstocktaking.co.uk for a chat about your pricing strategy.

There’s more than one way to skin a cat.

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About the Author:

Richard is the owner of RCM Stocktaking Solutions Ltd which provide Stock Auditing services to the licensed / restaurant / hospitality sector.