PROOF Insight Weekly Update
PROOF Insight
Research, Insights and Intelligence for the drinks & hospitality industry
Government’s mini-budget measures generally welcomed by the drinks industry??
Last week’s mini-budget introduced a raft of tax-cutting measures to get the economy growing and support?UK business. Measures included an extension of draught relief to cover smaller kegs of 20 litres, a positive step for small brewers, as well as a freeze on planned increases for duty on beer, cider, wine and spirits. The Treasury estimates the cut amounts to £600 million, which means that from February 2023 consumers will save 7p on a pint of beer, 4p on a pint of cider, 38p on a bottle of wine and £1.35 on a bottle of spirits. The Scotch Whiskey Association welcomed the news, which would otherwise have seen a double-digit inflationary increase, and CAMRA association felt the freeze will encourage consumption in pubs, clubs and taprooms. WSTA viewed it as a positive move although voiced concerns over the government’s consultation on reviewing the way the UK taxes alcohol.
Kate Nicholls, UKHospitality’s Chief Executive, welcomed the measures but also called for a reduction in VAT (to 10%) and business rates. While the proposed reintroduction of tax-free shopping for international tourists will attract overseas customers, that offers little support for local consumers – UK hospitality has one of the highest VAT rates of any modern economy. Many were disappointed with the lack of reduction in business rates including Sacha Lord, Night Time Economy Adviser for Greater Manchester, who added that the cut on corporation tax will have little impact for hospitality businesses as many struggle to turn a profit. Some small independents think the government could do more as they still face significant costs and have little head space especially after the Bank of England made borrowing harder after raising interest rates to 2.25% last Thursday.??
Sources: Morning Advertiser, The Spirits Business, The Drinks Business, Guardian
CAMRA attempt to revive cask ale with their Drink Fresh Beer campaign
Britain’s national drink – cask ale – hasn’t been living up to its title in recent years. Cask ale, previously the dominant format, has taken a major hit in recent years; now accounting for 46% of on-trade ale volume, down from 49% three years ago. The decline of cask ale is not a new trend, although it was certainly accelerated by the pandemic: cask fell from 67% to 46% of beer output from SIBA member breweries as brewers opted for the more reliable and longer life formats of keg and can.??
Changing consumer preference is also to blame for the decline of cask. Consumers increasingly favour the colder, carbonated ales that are typically available on keg such as IPAs and pale ales over the still, cellar-temperature traditional ales commonly available on cask. Consumer's are increasingly opting for lighter, citrussy flavours that are typically linked with keg ales.
In an attempt to revive the category, CAMRA recently launched their Drink Fresh Beer initiative. The campaign aims to promote cask ale as the “freshest beer on the bar” as it completes its final stage of fermentation in the pub cellar. Educating pub staff will be a key priority of the campaign, as staff recommendations are key for attracting younger drinkers. The 3-year initiative will also see the use of hand-pull wraps, TikTok, scannable QR codes on pumps, t-shirts, glassware and sampling stamps.??
Contact PROOF?to find out more about our upcoming Craft Beer Report.
Sources: Drinks Business, SIBA Craft Beer Report 2022, Proof Insight
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Ed Sheeran backs Own Our Venues campaign to save live music pubs from closure
The ‘Own Our Venues’ campaign was launched in June by the Music Venue Trust (MVT) to tackle the issue of closing venues. The concept is that the MVT would purchase the freehold of music pubs and then offer immediate rent reductions and contributions towards maintenance of the building. The campaign aims to raise £3.5m to acquire nine venues by the end of December for a pilot project. Ed Sheeran has thrown his weight behind the campaign to support grassroots music as “small, independent venues are so important to the music community”.??
17% of under 45s said they are more likely to visit an on-trade venue if there is entertainment such as live music. As well as being vital for the grassroots music industry, live music in pubs is a way of attracting experience-seeking consumers back out into the trade. The struggle pubs face post-pandemic are demonstrated clearly by CAMRA’s most recent Pub Closure Report where 485 pubs had ‘long term closed’ from January to June 2022, doubling from 254 that closed in the second half of 2021.
Contact PROOF?to find out more about the changing landscape of the on-trade.
Sources: PROOF POURtraits Panel Sept 2022, The Morning Advertiser, CAMRA??
Investments, Mergers & Acquisitions
Sources: Propel, The Caterer, Big Hospitality??
New Product Launches & Campaigns
Sources: C&C Group, Diageo, The Grocer, The Spirits Business
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