BRITAIN’S oldest brewer, with 290 pubs, is set to hike the cost of a pint following Labour’s tax raid—leaving beer lovers gutted.
Shepherd Neame, which is more than 300 years old, says new tax and wage hikes set to kick in next month, will cost it a staggering £2.6 million a year.
The pub giant, which brews Spitfire and Bishops Finger, has warned punters they’ll have to fork out more as it battles soaring costs.[/caption]
The pub giant, which brews Spitfire and Bishops Finger, has warned punters they’ll have to fork out more as it battles soaring costs.
The April hikes come after Chancellor Rachel Reeves’ October Budget saw National Insurance Contributions (NICs) increase for employers, from 13.8% to 15%.
These payments will decrease from £9,100 to £5,000, while the minimum wage will also go up on April 6.
The tax grab is meant to help fund the NHS, but furious pub bosses warn it’ll make it even pricier to keep staff, forcing them to push up drink prices.
Boss Jonathan Neame said: “The additional costs imposed on our sector are most unwelcome but the business model is flexible and we can adapt to the new circumstances.”
He also added the increase in labour costs has “undermined business and consumer confidence in the short term”, but remains “hopeful that the economy will return to a growth trajectory, with net disposable income growing and interest rates falling.”
What are employer National Insurance Contributions (NICs)?
CONSUMER reporter Sam Walker tells you everything you need to know.
Employer National Insurance Contributions (NICs) are effectively a tax on businesses used to cover social security benefits like Universal Credit and the state pension.
NICs are also paid by workers and the self-employed.
According to the Institute for Fiscal Studies (IFS), NICs are the UK’s second-biggest tax, expected to bring in around £170billion this financial year.
Employers only pay NICs on workers’ salaries from a certain threshold. This is currently £9,100 but will drop to £5,000 from April 6.
Those of state pension age or older do not have to pay NICs, but employers with workers aged 66 or older have to pay NICs on their earnings.
Beer sales took a hit in the second half of 2024, dropping 12.6% compared to the same time last year, according to the company.
Revenue also slipped a bit to £85 million, with pub sales up but premium bottled ales not shifting as well.
Still, the firm managed to boost underlying profit by almost 10% to £4.2 million, thanks to inflation easing off from last year.
PUB CHAIN PRICE WARNINGS
It’s not just Shepherd Neame feeling the pinch—other brewing giants have already warned that the price of a pint is set to rise.
Simon Dodd, chief executive of Young’s, earlier this year revealed a 20p hike on the price of a pint, in reaction to the Government’s Autumn Budget.
He said: “We’ll mitigate as much as we can of the NI contribution – we’ll do that through efficiency, we’ll do that through investing in our pubs.
“But there will be some price passed on to the consumer.”
All Bar One owner Mitchells & Butlers (M&B) told The Sun last year the price of its pints could rise by between 10p and 15p.
The group, which also owns Toby Carvery, said higher wage expenses were “by far the most significant increase” in its cost base following the Autumn Budget.
Greene King, which runs over 2,600 pubs, has already bumped up prices.
Likewise, Wetherspoons drinkers have seen an extra 15p added to their pints.
Shepherd Neame, which employs around 1,600 people, said despite making cost cuts, some price rises are “unavoidable” over the next 18 months.
And it comes at a tricky time—total beer sales for the firm fell by 12.6% in the second half of 2024, while revenue dipped to £85 million.
Despite this, the brewer still saw profits jump by nearly 10% to £4.2 million, helped by booming summer trade and a record-breaking Christmas period.
Neame said: “We had strong summer trade, but confidence evaporated before the Budget. Since then, things have picked up again.”
For now, though, beer lovers will have to dig even deeper into their pockets as yet another price hike looms.
PRICE OF PINT REACHES ALL TIME HIGH
The average cost for a pint down your local now costs an average of £5.08 across the UK.
A recent survey by The Morning Advertiser found that the average price of a pint is now 26p higher than the £4.82 reported by the Office for National Statistics in December.
Beer prices have been pushed up due to a perfect storm of rule changes, including increases to taxes on alcohol, packaging and employer costs.
The trade publication routinely examines pint prices across various regions of the country.
The most expensive region is still London, where a pint costs £6.16 on average, and the cheapest is Midlands at £4.47.
What is National Insurance?
NATIONAL Insurance is a tax on your earnings, or profits if you’re self-employed.
These contributions make you eligible for things like the state pension and certain benefits.
You’ll usually pay National Insurance Contributions (NICs) when you’re over the age of 16 and earning a certain amount.
For example, if you earn £1,000 a week, you pay nothing on the first £242.
Earn over that and you pay 10% on the next £725 – so £72.50. Then you pay 2%o on the rest, so £33, which works out as 66p.
For the self-employed rates are slightly different.
You can also get something known as National Insurance in some circumstances when you’re not working, for example when you have kids and claim certain benefits.
NICs are usually taken automatically by your employer and paid to HMRC, so you don’t need to do anything.
You can see how much NICs you pay on your wage slip.
Anyone working for themselves usually has to pay NICs themselves when completing a self-assessment tax return.
