Major pub chain with 1,550 sites confirms price of a pint to be hiked by 10p following Budget tax hit
A MAJOR pub chain with more than 1,550 sites has announced plans to hike prices at the bar following the Budget tax hit.
Marston’s has increased the price of draught beer across its pub estate, with drinkers facing paying about 10p more a pint at the pumps.
Although due to regional pricing, the increase is believed to be variable across the country.
The Sun understands that price increases will only impact a limited number of products, including draught beer.
A Marston’s spokesperson said: “This is not a decision we’ve taken lightly but, as has been widely reported, the cost of doing business is increasing across the sector.
“At Marston’s, we pride ourselves on offering great value and experiences for our guests every day of the week, and our teams are working hard to minimise the impact of external pressures on our customers and pub partners.”
It follows the group having reported a 65% boost to underlying pre-tax profits in the year to September 2024.
The increase comes as the pub group is looking to offset cost increases served up in October’s Budget, as well as wider trading conditions.
It is the latest business to indicate that some customers will see a knock-on effect from increases to business National Insurance Contributions (NICs) and an increase in the National Living Wage.
Employers currently pay NICs for most workers earning more than £9,100 a year.
The sum they pay is the equivalent of 13.8% of the employee’s earnings above that threshold.
For an employee earning £30,000, for example, the employer would pay NICs of £2,884.20.
But in the Budget, the government announced it would increase the tax rate to 15% and reduce the threshold at which firms must pay to £5,000.
It’s estimated that the move will raise £25billion – the equivalent of around £800 per employee for each firm.
At the same time, the minimum wage will rise to £12.21 an hour next April, and the minimum wage for people aged 18-20 will rise to £10 an hour, an increase of £1.40.
The cost increases all mean drinkers are unlikely to see the reduction in the price of a pint promised in October.
Reeves cut draught duty by 1.7%, which she said would mean “a penny off a pint in the pub”, but this saving appears to have been wiped out dramatically by the increase in staffing costs.
Many retailers have warned consumers to expect price increases following the announcement, which will dramatically increase employment costs from April 2025.
Those anticipating increased prices include Greggs, Toby Carvery owner Mitchells & Butlers and Wetherspoon as well as retailers Currys, Sainsbury’s, Tesco and Asda.
Chief executive officer of Fuller’s, Simon Emeny, told The Sun the price of beers at its hotels and boozers would likely rise by 10p following the budget.
And, Wetherspoon boss Tim Martin has also said the group would try to stay competitive on costs for customers but warned customers to expect some increases.
OTHER BUSINESSES TAKING A HIT
More than 70 businesses, including Tesco, Asda and Sainsbury’s, have told Rachel Reeves in an open letter that the changes announced in the Autumn Budget mean price hikes are a “certainty”.
The changes come into effect next April.
So far, retailers including Greggs, Toby Carvery owner Mitchells and Butler and Wetherspoon have all warned of price rises.
Here, we have listed all the retailers warning of price rises following Labour’s Budget tax raid.
Greggs
Roisin Currie, chief executive at Greggs, said the measures rolled out in the Autumn Statement would put pressure on prices, though is likely to be only “pennies”.
On average, Greggs customers spend £4 at its stores, and this is forecast to rise marginally.
It comes despite Currie promising there were “no plans” for further price increases this year after bumping the price of its sausage roll in July,
Over the summer, Greggs confirmed the price of its much-loved pastry snack and its vegan alternative had risen by 5p to £1.25.
She said the move was necessary at the time after experiencing a rise in costs from having to pay a higher national living wage for its 32,000-strong workforce.
Mitchells & Butlers (M&B)
All Bar One owner Mitchells & Butlers (M&B) told The Sun the price of pints could rise by between 10p and 15p.
The group, which also owns brands including Toby Carvery, said higher wage expenses are “by far the most significant increase” in its cost base following moves announced in the Autumn Budget.
Chief executive Phil Urban said M&B is facing around £23million a year in extra costs from the rise in national insurance contributions alone, with the increase in the minimum wage also sending its wage bill surging.
In total, its costs will rise by around 5%, or £100million, in 2024-25.
Mr Urban said the group’s prices would likely increase as part of efforts to mitigate the extra expenses.
Halfords
Halfords has warned that it may need to push up prices at its repair garages.
The retailer has more than 12,000 employees so the Budget changes will send its wage bill soaring by around £23million.
It said only around £9million of the extra costs were already included in its plans for 2025-26 and mitigated.
As a result, it may need to “pass through” the higher cost of wages to customers across its garages.
The group said it would be difficult to reduce the impact of a one-year cost increase of this size.
But Graham Stapleton, chief executive of Halfords, said that the retailer will “work hard to mitigate these costs”.
He added: “The cost implications from the recent UK Budget are particularly acute for a specialist retailer that provides expert advice and assistance to customers, face to face.”
Royal Mail
Royal Mail has warned that stamp prices could rise again after the Budget hit.
The boss of the postal service said hiking fees — just a month after the latest rise — was a possibility as it faces an enormous burden of extra costs.
Martin Seidenberg, chief exec of International Distribution Services, said: “We are looking at all measures including pricing, parcel cost efficiencies, investment plans, automation and our parcel network.
“I cannot rule out [increasing stamp prices] but we will look at not just consumer letters but also business mail and parcels.”
The cost of first-class stamps went up by 30p to £1.65 last month, while second-class stayed at 85p.
Wetherspoons
Wetherspoons boss Tim Martin has also warned of price rises.
The pub chairman said it would aim to stay competitive on customer costs but that all hospitality businesses faced the same pressures.
The chain’s tax bill is expected to rise by two-thirds next year after the Chancellor announced a hike in the national insurance for employers.
Martin said: “Cost inflation, which had surged to high levels in 2022, gradually diminished over the subsequent two years.
“However, it has now significantly increased again following the budget.
“All hospitality businesses, we believe, plan to increase prices, as a result.
“Wetherspoon will, as always, make every attempt to stay as competitive as possible.”
Wetherspoons anticipates that tax and business costs will increase by approximately £60million over the next year, including an estimated 67% rise in national insurance contributions.
Sainsbury’s
Simon Roberts, chief executive of Sainsbury’s, said the National Insurance hike would cost it £140million and warned that shoppers will face higher food prices.
Mr Roberts said: “It will lead to inflation and it’s pretty clear it’s going to come pretty fast.
“Given the low margins of the industry, there isn’t the capacity to absorb this level of unexpected cost inflation.”
AO World
The boss of online electricals retailer AO World has warned about price rises to offset more than £8 million in extra wage costs.
AO World estimates its wage bill will go up by around £4million due to the increase in NICs and about another £4million with next April’s minimum wage rise.
Founder and chief executive John Roberts said the group is likely to have to raise prices and make savings to mitigate the impact.
He confirmed “some of it will go into prices” but said it is too early to say by how much.
He stressed that the group would also look to use growth and efficiencies to counter the blow.
“This whole Budget is extremely inflationary for retailers,” he said.
“Is anyone naive enough to think that will not follow into pricing?
“From our point of view, it’s not about cost savings and taking headcount out; it’s about how we drive efficiencies and grow as a business.”
Currys
The boss of Currys said price rises will be “inevitable” as it prepares to face £32million in extra costs due to the Autumn Budget.
Alex Baldock, group chief executive of the electronics chain, also warned that policies announced by the Chancellor in October will “depress investment and hiring” plans.
Currys said it predicts £21million in extra costs linked to National Insurance and the minimum wage, a further £9million in costs passed through from partner businesses and an extra £2million in business rates costs.
Mr Baldock said the group still expects to grow profits this financial year “despite new and unwelcome headwinds from UK government policy”.
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