Peel Hunt, the brokerage firm, has issued a warning that British pub culture is under threat due to structural pressures and tax increases. Despite hospitality being the largest contributor to economic growth in November and December, according to government data, tax hikes in the October budget have "halted and reversed a year-long upgrade cycle", says Peel Hunt.
The increases to employers' national insurance and the minimum wage are expected to significantly ramp up cost pressures, as reported by .
The British Beer and Pub Association (BBPA) has stated that the cumulative impact of the October Budget will result in an additional £650m in costs for the sector.
"Consumer demand is there, however, profits are being wiped out with sky high bills and pubs are facing yet more rates and costs come April," said Emma McClarkin, Chief Executive of the BBPA.
º£½ÇÊÓƵHospitality echoed these sentiments, stating that while the industry's growth is "something the government should be backing", it is instead hindering the sector's potential by imposing such damaging costs on businesses.
"Driving growth is rightly the national priority and hospitality can be the vehicle, if the government rethinks its regressive changes to employers' national insurance contributions."
Retail and hospitality leaders have been campaigning to reverse or delay the changes to National Insurance Contributions (NICs), though analysts at Peel Hunt believe this is "very unlikely to succeed". However, they noted that the campaign might "make the Chancellor think twice next time."
The importance of pubs for social cohesion was highlighted by Sacha Lord, chair of the Night Time Industries Association (NTIA), who warned that the º£½ÇÊÓƵ could face an epidemic of loneliness due to pub closures. "For thousands of elderly and isolated individuals, their local is a vital source of companionship and community. And I'd argue that every generation needs pub life."
Lord also expressed his concerns directly to policymakers: "I told [Rachel Reeves] to act before irreversible damage is done, and urged her to give pubs a fighting chance – not even to thrive, but simply to survive," he stated.
The British Pub and Pint Association (BPPA) reported that just under 300 pubs in England and Wales called last orders for the final time in 2024. The sector has been hit hard by tax increases, structural shifts, and reduced disposable income, leading to a change in drinking habits with more people consuming alcohol at home rather than in pubs.
According to Peel Hunt, the share of out-of-home alcohol sales dropped to 43.4 per cent in 2024. This figure represents a steady decline over the past two decades and is now approximately 10 per cent lower than its pre-pandemic level in 2019.
"Even now, in the build-up to the spring Budget, we're witnessing job losses, venue closures and stalled expansion plans. I'm no economist, but even I know that this isn't the way to secure growth," Lord added.
