Brewers blame taxman for rises in beer price

THE UK's largest brewers yesterday defended above-inflation price rises on beer over the past four years, as well as big increases in pub rents, in evidence to a Commons select committee.

Defence of the price rises, as much as 17 per cent above inflation, coincided with news from the Brewers' Society of a further fall in beer consumption to the lowest level since 1970.

Beer consumption slumped by 800,000 pints a day last year, while beer production, adjusted for imports and exports, fell by 3 per cent to 36.3 million barrels.

Christopher Gill MP, for the committee looking at the effects of the Beer Orders on the industry and consumers, asked why lower wholesale prices for beer had not led to lower retail prices.

Peter Jarvis, chief executive of Whitbread, the brewer, said: 'One-third of the increase in retail prices is due to duty and VAT. One-quarter is the result of new legislation, rates and insurance.'

Another quarter was wage council awards to staff. Much of the rise was beyond the brewers' control, Mr Jarvis said. 'We can only control prices in managed houses, around 10 per cent of our business.'

All the brewers said it was too early to quantify the effects of the Beer Orders, which led to 11,000 pubs flooding on to the market and cost pounds 500m to implement.

On rents, Grand Metropolitan and Courage, joint owners of the Inntrepreneur pub company, came under heavy questioning.

Jean Carston MP, drawing on a letter from a landlord in her constituency, asked: 'Would you say an increase from pounds 17,000 a year to pounds 35,000 is a reasonable increase?'

Bob Williams, chairman and managing director of Grand Met Estates, replied: 'I don't know the pub. It would be unwise for me to offer an opinion.'

Recent controversy about Inntrepreneur leases was tackled by Richard Alexander MP. He said the 60-year-old landlord of the Horse and Groom in Arnthorpe, Yorkshire, had been told to sign a 20-year lease or 'he was out'.

Scottish & Newcastle Breweries said yesterday that it will cut around 270 management and staff jobs throughout its UK wholesaling operations over six months.