Britons have been warned that the price of a pint will rise by at least 10p due to Labour’s National Insurance hike announced in Chancellor Rachel Reeves’s Budget, Fuller’s has said.
The Chiswick-based group, which employs 5,500 staff across 370 venues, says it faces significant cost increases from the changes to employer tax contributions.
Simon Emeny, chief executive of Fuller’s, confirmed price rises would exceed 10p per pint across the industry, telling The Sun: “It won’t be as low as 5p.”
Some analysts suggest increases could reach as high as 40p per pint. Fuller’s revealed it faces an £8million hit to its bottom line from the Budget changes.
“We won’t be able to afford to just take the £8million hit to the bottom line, so there will be price increases and it will be inflationary,” said Emeny.
The CEO emphasised maintaining service quality remains crucial: “Our customers want a high level of service so it’s imperative we don’t compromise on that.”
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Pints could cost more going forward due to the recent National Insurance changes
PA / GETTY
The pub group reported strong recent performance, with underlying pre-tax profits up 21 per cent to £17.6million in the six months to September 28.
The Budget changes include raising the employers’ national insurance rate by 1.2 percentage points to 15 per cent from April.
The threshold at which employers become liable to pay NI on salaries will drop from £9,100 to £5,000 per year. Additionally, the National Living Wage for over-21s will increase from £11.44 to £12.21.
Fuller’s chairman Michael Turner criticised the changes, stating: “The Chancellor’s actions are a direct attack on those labour-intensive industries that are the lifeblood of our economy.”
He warned the measures would “drive inflation higher, put pressure on wages, and will drive many businesses to the wall”.
Major hospitality groups have joined forces to protest the changes in an open letter organised by UKHospitality.
Premier Inn, Slug & Lettuce and Fuller’s warned the measures would heap an extra £3.4billion costs on the sector.
The letter called for an exemption for lower band taxpayers working fewer than 20 hours per week, particularly to support venues hiring student bartenders.
“The changes to the NICs threshold are not just unsustainable for our businesses, they are regressive in their impact on lower earners,” the letter stated.
Chief Secretary to the Treasury Darren Jones defended the Budget measures, insisting the government was looking out for small businesses and working people.
“There are measures more broadly in the Budget which we think are good for business, and good for growth, and good for the economy,” he told the BBC.