The Beer Duty Myth: Why Cutting Beer Duty Won’t Save Pubs
Every Budget, we hear the familiar call: “Cut beer duty to save pubs.” It’s an appealing soundbite — but it’s also deeply misleading.
Beer duty is brewery tax — not pub support
Beer duty is a tax paid by breweries on the beer they produce — not by pubs. Publicans don’t pay it directly and have no control over whether any savings are passed down the supply chain. This is why many in the industry call it what it really is: brewery tax. When duty is cut, the savings go to breweries — not pubs — and in practice, they are almost never passed on to publicans.
Even if breweries did pass on duty savings, the effect would be tiny.
– A pint in a pub might retail at £5.
– Beer duty makes up about 31p of that (before VAT).
– A 1p duty cut is just 0.2% off the price — barely noticeable.
Meanwhile, pubs are being hit far harder by:
– Soaring energy bills
– Rising business rates
– Skyrocketing rent and beer tie prices from pubcos
- Staffing costs and wage pressures
And in tied pubs, the situation is even worse.
When the Treasury raises beer duty by 2%, brewers may add about 2% to their prices to cover it — but pubcos will often go further, adding significantly more than the duty rise to the entire wholesale price of a cask (firkin), not just the duty portion. (As regularly reported by tenants and in the trade press.)
Duty on a 72-pint cask of 5% ABV beer is about £22 (before VAT). A 2% duty rise would only add around 44p, but if the pubco applies 4% to the whole £150 cask, the tied tenant ends up paying an extra £6 — more than ten times the actual duty rise.
And when duty goes down, the opposite doesn’t happen — pubcos rarely reduce their prices. So while big brewers and pubcos keep the savings, tied tenants see nothing at all. Whether duty rises or falls, tied pubs lose out every time.
So, who DOES benefit from beer duty cuts?
It isn’t pubs.
It isn’t publicans struggling to make a living.
It isn’t hard-pressed small brewers.
And it isn’t hard-up pub customers.
It’s the giant (mainly foreign-owned) global brewers and the giant pubcos/property companies with whom they have a cosy, symbiotic relationship.
Every time a well-intentioned but ill-informed Chancellor claims they are “reducing the price of a pint in the pub”, what they are actually doing is handing hundreds of millions of pounds to huge and hugely profitable corporations.
One example shows just how much. The previous Government’s draught duty relief introduced in 2023 was meant to help pubs. But as sector commentator and former brewer Steve Dunkley (Beer Nouveau) calculated, the relief — set at £19.08 per litre of pure alcohol, or around 4p per pint — had a very different impact.
For small brewers, that 4p helped cover rising costs (and even then, many have since closed).
For the global brewers, it was a windfall. On Carling lager alone, it was worth a staggering £16,969,256 per year.
So this duty change — introduced under the banner of “helping pubs” — has actually meant a tax break worth hundreds of millions of pounds for huge, mainly non-British, highly profitable corporations. That should not be cause for backslapping and media puns — it should be a national scandal.
Every time there is a beer duty cut, the headlines should say:
“UK Government gives multimillion-pound tax breaks to foreign companies.”
This doesn’t help the British economy — the profits go offshore, to foreign shareholders or, in the case of indebted pubcos, to foreign bondholders and investment funds.
It does nothing to help pubs, publicans or customers struggling with the cost of living — and it diverts tax revenue away from public services at the same time as the Government is cutting winter fuel allowances, disability benefits and business rates relief for small firms.
There could not be a more inappropriate use of tax relief.
Giving huge tax cuts to companies with multi-million-pound turnovers and vast profits is indefensible — and frankly grotesque — when we are told the Government must make more “difficult decisions” (in other words, tax rises and benefit cuts).
It is time civil servants did their maths, and ministers did their research. It is time for relief to go to pubs that need support — not to huge multinational companies that don’t.
Pubs Are Closing — Fast
The pressure on pubs is very real.
- In the first half of 2025, more than 200 pubs closed (either demolished or converted) — about 8 per week. (Sky News)
- In the past year alone, 289 closures were recorded across England & Wales, with roughly 4,500 jobs lost. (British Beer & Pub Association)
Duty cuts are doing nothing to stop this decline — and never have.
What Actually Would Help Save Pubs
If government really wants to support pubs, the focus should be on measures that directly reach publicans, such as: - Cutting business rates for pubs
– Ending unfair beer tie practices and giving tenants fair market pricing
– Reducing VAT on food and drink sales in pubs
– Targeted energy cost support
– Investment in local independent breweries who supply directly to pubs
- Giving pubs planning protection — ensuring pubs have protections under planning law to prevent conversions or demolition, helping safeguard community pubs. (Campaign for Pubs – Give Pubs Protection)
The Bottom Line
Cutting beer duty makes for good headlines, but it’s a myth that it saves pubs. The evidence shows it does little or nothing for publicans or pubgoers, while handing millions to the big brewers.
If we care about saving pubs, we need policies that actually support the people running them — not just the global corporations supplying them.
by Dawn Hopkins
Licensee of the Rose Pub & Deli in Norwich
Vice Chair of Campaign for Pubs