Fuller hit as group absorbs duty rises

London Pride brewer Fuller, Smith & Turner yesterday warned of a profits squeeze as it struggles to pass on rising beer duty to cash-strapped customers.

The group made lower margins on drink sales in the half-year to October 1 as it was unable to pass on a 7 per cent rise in tax and said it will face a further hit from March when the tax is proposed to go up by the same amount.

The company launched a call for the tax to be abolished ahead of the Chancellor’s autumn statement on Tuesday, claiming it is damaging the UK economy and the pub industry at a time when it is also battling higher input costs and VAT.

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Fuller also blamed a 1 per cent fall in UK sales of its own brewed beer, including ESB and Honeydew, on the duty.

The company reported a 5 per cent rise in underlying profits to £16.5m as it benefited from a strong performance from its managed and leasehold divisions, boosted by demand for pub grub, as well as soaring exports of its beer.

The company said a 35 per cent rise in beer duty since March 2008 had “heavily impacted” UK beer volumes across the industry and had “driven people out of pubs and into supermarkets” and reduced the Chancellor’s tax income.

Michael Turner, Fuller’s chairman, said: “Our industry adds over £21bn to the UK economy and supports almost one million much-needed jobs.

“It is not a sector the Government can afford to neglect, particularly as their own figures show youth unemployment has now exceeded one million.”