Pub sector expects pain Chancellor expected to raise beer duty in the Autumn Budget

The pub industry in the north of Scotland could take a hit if beer duty is raised in the Autumn Budget as expected next week.

Tax on beer is expected to rise by 3.4%, which industry groups fear could cause job losses and closures, and deal a huge financial blow to the sector.

With consumers increasingly opting for cheaper supermarket drinks, and pub margins stretched, local establishments are braced for further struggles.

Aberdeen’s 164 pubs and bars employ 2,464 people directly, paying them a combined £20 million in wages, analysis from Oxford Economics shows.

They also support another 628 jobs and £13m in wages indirectly, either through related jobs, like those in the supply chain, or through the money spent by people working in the pub industry.

Altogether, the pub, brewery and beer trade in Aberdeen adds £75m to the economy.

In Aberdeenshire the figure is £95m, in the Highlands £78m and in Moray £25m.

In total, there are 4,645 pubs across Scotland, adding £1.1 billion to the economy.

However, over the past two years pubs have been closing at an average of 3.2 per day.

Pub margins are being further stretched by increasing numbers of younger people shunning alcohol, with almost a third of under-25s now tee-total.

And a survey conducted by Britain’s Beer Alliance, an umbrella organisation for major brewers and pub companies, shows that more than a third of people would reconsider a trip to the pub if beer prices increased.

It also showed that a decrease in pubs could cause more than just financial loss, with 77% saying they go to the pub as a place to relax and unwind, and two in five saying it acts a social hub.

If that trend continues, Britain’s Beer Alliance says one in 10 pubs nationwide could close within five years.

David Cunningham, programme director of Britain’s Beer Alliance, said: “Pubs already face a range of tax pressures and if the chancellor raises beer duty in line with Retail Price Index inflation as planned on October 29, pubs will feel the pinch even more.

“Based on current closure rates, we estimate that within five years more than one in 10 pubs in the UK will have closed for good, costing thousands of jobs.”

Photograph by Scott Baxter THREAT: Tax on beer is expected to rise by 3.4% which industry groups fear could cause job losses and closures, hitting the industry hard.