Price of a pint could rise by 25p in October, Sacha Lord warns

Greater Manchester’s Night Time Economy Adviser Sacha Lord has warned that the price of a pint could be rising from October 1st.

Lord estimated that both food and drink prices will rise in line with the government’s hike in VAT for the hospitality sector – the tax rate for pubs, bars, restaurants and other hospitality establishments was reduced to 5% to help the hospitality sector survive the pandemic but, two weeks ago, it was announced that it will increase to 12.5% at the end of the month.

By 2022, it is expected to return to the usual 20%.

The price of an average pint in England is predicted to rise by 25p to £3.94, while the average glass of wine is likely to shift from £4.07 to £4.35 to cover overall losses felt by operators.

@pintsofmcr / Instagram

This week, Lord has urged the Government to rethink the increase, calling for the move to be delayed until the industry recovers to pre-pandemic levels.

He said: “The 5% VAT rate was the single biggest recovery measure for the industry over the past eighteen months, and has enabled venues to stay in business and staff to keep their jobs. Removing this relief will have a severe effect on operators across the country.

“VAT is the biggest expense in any business, and it is the quickest way to reduce cash flow. For businesses who have little-to-no cash reserves as a result of the pandemic, it could be last orders.

“Many operators will be forced to pass the increase onto the customer to stay afloat, and we could see prices across food and drink rise by as much as 7-10% from October as bosses attempt to recover losses and fight the dire financial situation they find themselves in.”

@louishansel / Unsplash

Lord continued by stressing that the VAT increase will see the permanent closure of many local and independent venues, before warning that ‘we have a tough winter ahead for our nightlife sector’.

He said: “Operators will take at least three years to recover from this pandemic, and I urge the Government to rethink this rise and extend the current rate until that point. The hospitality industry is vital to the UK’s recovery and growth.

“Cancelling a measure which will result in venues closing, staff being made redundant and VAT bills left unpaid through bankruptcy will only hinder, not help the economy. To punish the sector now will have devastating consequences just as it starts to recover.”