How to Save Pubs
Britain was better when most people had a pub within walking distance
The UK’s pub industry is on life support. If there’s any hope of saving this centuries-old institution, it lies in restructuring the way pubs and the drinks they sell are taxed. For years, supermarkets have been edging pubs out of the market by offering alcohol at prices pubs simply can’t compete with. But the solution is simple: remove alcohol duty from ‘on-sales’ and VAT from all drinks sold in pubs, allowing them to level the playing field against the supermarket giants.
To grasp the urgency of the situation, one need only look at the numbers. Back in 1990, the UK had around 63,500 pubs, which equated to 111 pubs for every 100,000 people. Today, that number has plummeted to roughly 47,200, or just 58 pubs per 100,000 people. In less than 30 years, the number of pubs per capita has halved, and the decline continues. The first quarter of 2023 alone saw 138 pubs shut their doors for good, a trend that shows no sign of abating.
Why Are Pubs So Important?
Pubs aren’t merely businesses; they are the lifeblood of many communities. In countless towns and villages across the UK, the local pub is the last communal meeting place, offering more than just a pint. It’s a venue for family gatherings, social events, and maintaining a sense of belonging. A report by the Campaign for Real Ale (CAMRA) pointed out that pubs serve as vital hubs for social cohesion, especially in rural areas where other social amenities are scarce.
When a pub closes, the community loses an important space for people to interact, connect, and engage with one another. For some, especially the elderly or those living alone, a visit to the local pub may be their only social interaction for days. The pub has traditionally been a place where issues are debated, where friendships are formed, and where local traditions are kept alive. Without pubs, we risk further fragmenting already isolated communities.
Competition from Supermarkets
While pubs are closing at an alarming rate, supermarket alcohol sales are soaring. Between 2010 and 2019, the Office for National Statistics (ONS) recorded a staggering 50% rise in supermarket alcohol sales, a trend that directly correlates with the decline in pub sales. Supermarkets can sell alcohol at significantly lower prices, thanks to economies of scale and lower operational costs. Pubs, meanwhile, are burdened with higher expenses—rent, staff wages, utility bills—and, crucially, taxes – VAT, business rates, and alcohol duty, which hit ‘on-sales’ much harder than ‘off-sales’ in supermarkets. While the alcohol duty is 37 pence for a pint of 4.5% beer in a supermarket, and 34p for draught beer in pubs, VAT on a £2 supermarket pint is only 33p compared with 83p for a pub pint, overheads are higher for pubs, as is the profit margin necessary to sustain the business due to disparity in volume. There is already a difference in alcohol duty between off-sales and draught sales. At Spring Budget 2023 the government announced legislating to increase the new Draught Relief from 5% to 9.2% for qualifying beer and cider products, and from 20% to 23% for qualifying wine, spirits based and other fermented products. This indicates a recognition that rates of alcohol duty can be used to support pubs, but the amount is so inadequate as to have a negligible effect.
Currently, alcohol duty in the UK contributes around £13 billion annually to the Treasury, about 70% of this from supermarkets. Supermarkets can sell alcohol at far cheaper prices, encouraging people to buy in bulk and drink at home. As a result, pubs are fighting a losing battle, and the community suffers as social drinking shifts from a controlled, moderated environment to binge drinking in private.
The Case for Reducing the Tax Burden on Pubs
If pubs are to survive, one clear policy solution is to remove alcohol duty from ‘on-sales’ as well as to zero-rate the VAT for all drinks sold in pubs. This would allow pubs to price alcohol and soft drinks more competitively, giving them a chance to win back customers. Pubs are unique in that they provide a regulated space for alcohol consumption. The publican has the legal responsibility to ensure patrons don’t drink to excess, creating a safer environment for social drinking. By contrast, supermarket alcohol is consumed without any oversight, often leading to higher levels of binge drinking and associated public health risks.
Eliminating alcohol duty and VAT on pub sales would help pubs stay afloat in an increasingly competitive market. More than that, it would preserve the social and cultural value that pubs bring to their communities. For many towns and villages, the pub is the only remaining public space where people can gather. By alleviating the tax burden on pubs, the government can protect these vital community assets while ensuring that alcohol is consumed in a more responsible and socially constructive environment.
Cultural Value and Economic Impact
The cultural value of pubs cannot be overstated. From local traditions to fostering social bonds, pubs are integral to the fabric of British life. The phrase “meeting down the pub” is as much a part of the national lexicon as a cuppa. But beyond their cultural significance, pubs also contribute enormously to the economy. The British Beer & Pub Association (BBPA) estimates that pubs support around 430,000 jobs, many of which are in economically vulnerable rural areas.
When pubs close, these jobs disappear, and the local economy suffers. Empty pub buildings become eyesores, property values drop, and local councils lose vital business rate revenues. In the long run, this also affects tourism, as visitors to the UK often seek out traditional pubs as part of the quintessential British experience. Thus, saving pubs isn’t just about protecting a way of life; it’s about supporting the economy and safeguarding jobs.
Business rates charged to public houses need to re-appraised taking into account the importance of such hostelries to the local economy and community.
The Human Cost of Pub Closures
Beyond the economic statistics and community impact, there’s a human story at the heart of pub closures. Publicans who have spent years—sometimes decades—running their local pub are being forced to give up their livelihoods. Families who have owned pubs for generations are being driven out of business by mounting costs and unsustainable competition from supermarket chains.
The human cost isn’t limited to the publicans either. Regular patrons—especially the elderly—who rely on the pub as a social lifeline are being left isolated as their local closes. A 2019 study by the Royal Society for Public Health found that regular pub-goers were significantly more likely to report feelings of social connection and wellbeing than those who drank at home.
Conclusion
Saving pubs is about preserving the social and cultural fabric of the UK. The current tax system unfairly penalises pubs while allowing supermarkets to dominate the alcohol market. By eliminating alcohol duty and VAT from drinks sold in pubs, the government would give them the breathing space they need to survive, protect vital jobs, and maintain the community spaces that are so integral to British life.
The UK cannot afford to lose any more pubs. These institutions are more than just places to drink—they are the heart of communities, a source of social cohesion, and a vital part of the nation’s cultural heritage. If the government is serious about levelling up the economy, protecting jobs, and safeguarding community spaces, it must act now by radically reducing the tax burden on pubs and giving them a fighting chance. The alternative is a future where the pub is a thing of the past, replaced by cheaper, impersonal drinking at home, devoid of the rich social interaction that has characterised British life for centuries.
[i] Economies of ale: changes in the UK pubs and bars sector, 2001 to 2019
Office for National Statistics
[ii] Research Briefing Pub Statistics House of Commons Library