Britain's oldest brewer says it will hike beer prices due to 'challenging' conditions
Shepherd Neame, which runs 290 pubs, said beer sales dropped more than 12 per cent at the end of last year
Britain's oldest brewer has announced plans to increase its beer prices in response to the upcoming tax and wage hikes set for April.
Shepherd Neame, which operates 290 pubs, estimates that the two policies introduced by the Government last year will cost it around £2.6 million annually.
"We plan to mitigate the majority of these costs over the next 18 months through price increases and cost efficiencies," said chief executive Jonathan Neame on Wednesday. Chancellor Rachel Reeves had raised employer national insurance contributions (Nics) and the minimum wage in the October Budget.
The Nics hike, due to take effect next month, is intended to fund enhancements to public services like the NHS, reports Bristol Live. However, the policy has been criticised by some firms for making employment more costly, with hospitality groups employing many low-wage workers expected to be particularly affected.
Mr Neame, whose firm employs approximately 1,600 individuals, described the current market as "challenging". He 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.
"We have an excellent pub estate and our beer business is evolving to meet current consumer tastes and trends."
Shepherd Neame, with a history spanning over 300 years, is the oldest company of its kind in the UK. It produces beers under various brands including Spitfire, Bishops Finger, and Whitstable Bay.
Beer sales took a tumble, dropping by 12.6 per cent in the latter half of 2024 compared to the same time the year before. Revenue also dipped to £85 million, with more pints being pulled at pubs and fewer premium bottled ales being sold.
But it is not all doom and gloom – underlying profit managed to climb nearly 10 per cent to £4.2 million, thanks to inflation easing last year. Mr Neame said: "We enjoyed buoyant summer trade in July and August, with consumer and business confidence high.
"During the autumn, confidence evaporated in the run-up to the Budget. Since then, activity picked up again and we enjoyed record Christmas trading, with good growth on 2023, with many individual pub records exceeded."
Despite labour costs giving businesses and punters cause for concern, he is keeping his glass half full, saying he's "hopeful that the economy will return to a growth trajectory, with net disposable income growing and interest rates falling".