Major pub chain forced to hike the cost of a pint by 15p after Labours tax grab landed it with extra £8million staff costs
A major pub chain has been forced to increase the price of a pint by 15p after Rachel Reeves tax raid left it with an added £8million in staff costs.
A major pub chain has been forced to increase the price of a pint by 15p after Rachel Reeves tax raid left it with an added £8million in staff costs.
Fullers says the rise in national insurance contributions (NICs) from last Octobers budget as well as the higher minimum wage from April has left the firm badly hit.
The Chiswick-based company - which has 5,500 staff members - warned back in November last year the financial measures would cause the price of its pints to rise.
It comes as pub and hospitality companies have been among the worst affected amid soaring staff bills.
Fuller, Smith & Turner chief executive Simon Emeny said the chain had tried to be sensitive with price increases, to make sure that going to the pub remains an affordable treat.
He added the group would keep its pricing under review over the rest of the year.
Fullers is the latest to raise the cost of a pint as pub chains attempt to offset soaring staff bills.
The British Beer and Pub Association (BBPA) recently said the average price of a pint of beer would surge past £5 for the first time because of cost hikes hitting the sector.
Fullers says the rise in national insurance contributions (NICs) from last Octobers budget as well as the higher minimum wage from April has left the firm badly hit
Pub and hospitality companies have been among the worst affected amid soaring staff bills
Rachel Reeves increased NI contributions and lowered the threshold to include thousands of part time staff for the first time
A spokesman for the BBPA added the average cost of a pint in the UK is expected to rise by about 21p as a result.
But Fullers boss Mr Emeny said the firm could not offset the cost impact with price increases alone.
The group, which has about 5,500 staff, is doubling down on investment in its bars and staff training, to drive sales higher, which it hopes will counter the extra costs.
Six months down the line and I dont think price increases are the only answer. It has to come through higher sales, he said.
Reeves announced last year the employers rate of NI would increase by 1.2 percentage points, to 15 per cent from April.
In addition, the level at which employers become liable to pay NI on salaries would reduce from £9,100 to £5,000 per year.
And the minimum wage for over 21s, known officially as the National Living Wage, has now risen from £11.44 to £12.21.
Mr Fuller said his firms consumer spending outlook would be sensitive to the interest rate outlook, and whether the Government moved to increase personal taxes.
Mr Emeny previously said the increase in pints across the industry would be more than 10p
The comments came as Fullers posted a 32 per cent jump in underlying pre-tax profits to £27 million for the year to March 29.
Like-for-like sales rose 5.2 per cent, and the group said growth had continued into the first 10 weeks of the new financial year, albeit at a more muted rate of 4.2 per cent.
It also announced its chairman of 18 years, Michael Turner, a member of one of the three founding families, would retire at the groups annual general meeting in July, after a 47-year career with the group.
He will be replaced by Mr Emeny, who will become executive chairman, the first person to take the role who is not a member of the founding families.
Fred Turner will be promoted from retail director to chief operating officer.
A number of other founding family members remain on the board, including non-executive directors Sir James Fuller and Richard Fuller.
On his final set of full-year figures for the group, the outgoing chairman said it had been an excellent past year.
Mr Turner added: This strong performance has been achieved despite the business operating in a challenging and, at times volatile, economic environment.
Pictured: A general view of Fuller Smith & Turner in Chiswick
The geopolitical situation has caused uncertainty in global markets and the decisions made by the Chancellor in her October budget hit the sector hard and reduced confidence in hospitality stocks.
Mr Turner, An outspoken critic of the move to raise national insurance contributions (NICs) from April, said: The changes to national insurance contributions took everyone by surprise and I fear it could be terminal for a number of smaller operators in our market.