Pub-goers have been warned to expect a 25p increase on the price of their pint within weeks because of a tax hike that could potentially see some night venues close.
According to Greater Manchester’s Night Time Economy Adviser Sacha Lord, planned rises in the VAT rate for the hospitality sector will "force" owners of establishments to pass on the cost to revellers.
The Government had lowered the sales tax for pubs, bars, restaurants and other hospitality establishments during the pandemic to 5% to help assist struggling businesses, but have announced that they will be taking it up to 12.5% at the end of the month.
Mr Lord, who is responsible for the northern city's leisure and partying scene, has called on the government to delay the measure, which he says provided valuable support to one of the worst hit areas of the economy during Covid.
He said: “The 5% VAT rate was the single biggest recovery measure for the industry over the past 18 months, and has enabled venues to stay in business and staff to keep their jobs. Removing this relief will have a severe effect on operators across the country.
“VAT is the biggest expense in any business, and it is the quickest way to reduce cash flow. For businesses who have little-to-no cash reserves as a result of the pandemic, it could be last orders."
“Many operators will be forced to pass the increase onto the customer to stay afloat, and we could see prices across food and drink rise by as much as 7-10% from October as bosses attempt to recover losses and fight the dire financial situation they find themselves in.”
Meanwhile, industry heads said that an international shortage in CO2 gas – which gives beer its distinctive 'fizz' – is likely to hit supplies of some of the UK's favourite tipples in the weeks ahead.
James Calder, chief executive at the Society of Independent Brewers, told i News that bottled and keg beers are the most likely to be affected, while cask ales are thought to be mostly safe for now:
He said: “The vast majority of small breweries produce fresh cask beer – and for those brewers this latest shortage of CO2 won’t have an immediate impact – but for the increasing number making keg, bottled or canned beer it will come as an additional worry."
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“Two thirds of the beer that small independent brewers produce is sold as cask beer, which has a naturally occurring carbonation and does not rely on added CO2.
“But as more and more brewers have shifted production to bottled and canned beer to capitalise on drink-at-home sales during Covid the impact could be greater than in the past."
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