Londoners might expect to pay £5 for a pint, but the national average is poised to rise above that watermark for the first time, with publicans attributing the price increases to the recent rises in minimum wages and employer NI contributions.

The sobering milestone is likely to be reached next month, according to research by Frontier Economics, with the average price of a pint of beer on course to hit £5.01, up from £4.80.

The British Beer and Pub Association (BBPA), which commissioned the research, said landlords had been left with no choice but to raise prices to offset tax rises that are due to come into force in April.

Pubs will face greater overheads due to an increase in the national minimum wage, a rise in national insurance rates and a decrease in the threshold at which they start paying out national insurance.

Discounts on business rates paid by hospitality firms will also be cut from 75% to 40% from April. The net cost to the pubs sector of these measures, introduced in last October’s budget, will hit £650m in total, the trade body said.

Emma McClarkin, the chief executive of the BBPA, said:

“The cumulative impact of these taxes and regulations is now plain to see and it is highly unfortunate that the only way many pubs can remain viable is to pass on the array of upcoming costs to consumers.

 

No one wants to see the cost of an average pint increase by a further 21p and break the £5 average pint barrier that will be required for pubs to maintain their punishingly slim profit margins.

 

It is more urgent than ever that government looks at ways to cap or reduce the costs of doing business so we can keep pubs open, preserve their community value and make sure the price of a pint remains affordable for all.”

 

Tim Black, associate director at Frontier Economics, added:

“The beer and pub sector has shown real resilience through a tough few years – navigating the pandemic, the energy crisis, and the cost-of-living squeeze.

 

Trading conditions are still challenging, but businesses have adapted. There are signs of improved sentiment and fresh investment as extreme pressures ease and consumer confidence slowly picks up. But more headwinds are coming.

 

The sector is at the sharp end of a wave of policy changes that will push up costs – higher wages, increased national insurance, reduced business rates relief, and new packaging rules.

 

The cumulative impact willbe significant. It’s vital that policymakers recognise these pressures and ensure the environment supports investment and growth.”