British Beer Sales Down

According to the British Beer and Pub Association's quarterly beer barometer, "sales are down 4.5 per cent compared with the same quarter last year, while the fall in pubs is a massive 10.6 per cent."

The BBPA said the figures added weight to concerns over pub closures, rising prices and shrinking consumer confidence...

However sales in supermarkets and shops had continued to rise, with a 3.8 per cent increase.

The BBPA shows its political savvy in the release, emphasizing over and over the hit to the government's coffers:

"This is hitting Britain's brewers and pubs hard. It's also creating a large hole in the Chancellor's pocket with the Treasury's tax take also down. This must call into question the Government's planned beer tax escalator. Where's the logic in taxing more when you're taking less?..."

It estimated the fall in sales had led to Chancellor Alistair Darling collecting £88 million less in beer duty and VAT than in the same period in 2007...

"Falling tax revenues show it's time for a rethink."

Given Darling's recent increases of the duty on beer, it looks like cross-price elasticity of demand at work: consumers are substituting home drinking for pub drinking, to avoid mark-ups.