Bad weather dampens beer sales in 2007
Thanks to the summer that never was, the UK’s top beer brands are counting the cost of a year with no major football tournament.
In the off-trade sector, market leader Stella Artois’ sales dropped 5 percent to GBP 518 million, Carling’s fell 3 percent to GBP 361 million and Budweiser’s 8 percent to GBP 151 million according to Nielsen research, it was reported. Off-trade beer sales for the year ending 6 October 2007 were GBP 2.73 billion compared with sales of GBP 2.71 billion for the year ending 7 October 2006. That’s an increase of 0.6 percent.
However, these figures only take into account the past 12 months.
Looking back, British brewers have every reason to feel concerned. The biggest slump in beer sales since the Great Depression has prompted the nation’s brewers to write to all members of parliament in November calling for urgent Government action to freeze beer duty.
The letter from the British Beer & Pub Association (BBPA) says that stark market conditions are being made worse by the Government’s current tax policy.
The British beer market is under considerable pressure as overall beer sales – through pubs and the off trade - are now at their lowest level since 1969. The total beer market has fallen by 22 percent since its peak in 1979. That’s a loss of more than 2.5 billion pints, or 7 million pints a day.
Pub beer sales have suffered even more. Britain’s 58,000 pubs have lost 49 percent of beer sales from their peak in 1979. That’s a loss of more than 5 billion pints – meaning today’s pubs are selling 14 million fewer pints per day.
At the same time, costs are soaring. Brewers have seen prices for barley, malt, glass, aluminium and energy go up sharply
Between 2004 and 2006 the profits of the major brewers in the UK have fallen by 78 percent, said the BBPA. The result of the squeeze is that companies now earn only 0.7 pence per pint in profit (or slightly more than one pence per litre), compared with the average of 33 pence per pint they pay to the Chancellor in beer duty.
Over the last decade, the Government’s tax policy has only increased the burden on brewers. Since 1997, beer duty has increased by 27 percent and beer consumption fallen by 11 percent.
In contrast, over the same period spirits duty has risen by only 3 percent and spirits drinking has risen by 20 percent. Similarly, wine duty has increased by 16 percent and wine drinking by 46 percent.
