Beer sales fall 7.2 percent in Q3

Source: Reuters

Date :27/10/2008 11:22:37

The iconic British pint has become the latest casualty of the credit crunch with quarterly beer sales slumping to their lowest level for a decade, a report released on Monday shows.

UK beer sales fell 7.2 percent in the third quarter of 2008, following last quarter's 4.5-percent drop, the British Beer & Pub Association (BBPA) said in its Quarterly Beer Barometer report, published on Monday.

In total, 161 million fewer pints were sold in July to September this year compared to the same period in 2007 -- a fall of 1.8 million pints a day and the largest third-quarter fall for a decade.

Hit by a nationwide smoking ban and competition from supermarkets, beer sales in pubs, bars and restaurants were down 8.1 percent in the third quarter. Sales in supermarkets and off-licences fell 6 percent in the third quarter compared to last year, proving that drinkers are shunning the idea of enjoying a beer at home as well as in the pub.

The new figures highlight the impact the economic downturn and weaker consumer confidence is having on British households, says BBPA Chief Executive Rob Hayward.

"The accelerating decline in beer sales is a clear sign of a worsening economy, worried households and weakening spending.

The downturn has now broadened to affect sales through both pubs and supermarkets. This sales trend is symptomatic of the problems infecting the broader economy," Hayward said in a statement.

The BBPA also puts the decline down to the impact of the government's heavy taxes on alcohol, which it estimates will leave the Treasury facing a 1.2-billion-pound tax shortfall, in real terms, over the next three years compared to their forecasts.

The BBPA estimates the Treasury has collected 138 million pounds less in beer duty and VAT in the six months since the Budget.

"The government needs to be looking to ease the constraints of the tax and regulatory burden on our sector. We're not looking for a handout just a hand-up. They must abandon their current plans to increase beer taxes by a third through a new tax escalator," said Hayward.

In the year to September 2008, beer sales fell by 4.4 percent compared with the previous year. Sales in pubs, bars and restaurants are down 9 percent, while sales in supermarkets and off-licences are up 2.1 per cent.

(Reporting by Rhys Jones; editing by Simon Jessop)

LONDON (Reuters)