Energy support for households reversed
This week, the newly appointed Chancellor, Jeremy Hunt, reversed the energy support for households set out in the mini-budget in order to stabilise the market. The support, which was intended to last two years, will now end 17 months earlier than expected in April 2023. Six months from now, households might see their energy bills rise above £4,000 according to Cornwall Insight. Latest ONS data shows that 42% adults who pay energy bills said they found it very or somewhat difficult to afford their existing energy and two-thirds of adults are already reducing spend on non-essential items as inflation rate hits 10.1% in September.
Businesses will receive support as set out in the mini-budget, however, the promise to help the most vulnerable industries, such as the hospitality industry, is now in doubt. The lack of uncertainty is forcing hospitality companies to curtail investment plans for 2023 and the sector is unlikely to return to growth levels predicted prior to the energy crisis.
The Treasury is launching a review looking at the energy crisis to design a new, more targeted, approach which the Chancellor says will cost the taxpayer less than originally planned.
Sources: BBC, ONS, The Caterer, Cornwall Insight
Chancellor reverses alcohol-duty freeze
New Chancellor Jeremy Hunt has performed a U-turn on former chancellor Kwasi Kwarteng’s freeze on alcohol duty announced last month, much to the disappointment of the alcohol and hospitality industry. The planned freeze would have prevented any increases in alcohol duty between February 2023 and February 2024. Now, alcohol duty is set to rise in line with inflation, which currently sits at 12.3% – suggesting the price of a pint of beer would increase by £0.07, whilst a bottle of spirits would increase by £1.35. Hunt expects the reversal to save the government £600m a year – money that would certainly have helped many pubs to survive over the coming winter.
The Chancellor also announced that the government will be going ahead with its plan to review and potentially overhaul alcohol duty by August 2023, adding further uncertainty as to what the future looks like for the hospitality sector. Currently, UK alcohol duty is calculated depending on the drinks category as well as the ABV with duty on wine weighted significantly higher than beer regardless of ABV. The outcome of the reform remains unclear, although many anticipate a system based primarily around ABV as opposed to category.
Sources: Drinks Business, Just-Drinks, gov.uk
Innis & Gunn to open Glasgow taproom as consumers look for more from the on-trade
Edinburgh-based Innis & Gunn are set to open their second venue in Glasgow, a taproom where customers can brew their own craft beer in their “Brew School”. In a move that will create around 50 jobs, the venue will also be able to hold live performances, would have a restaurant sub-leased to a “quality restaurant operator” and will feature over 20 craft beers on tap as well as guest beers from a range of breweries.
As footfall in the on-trade starts to take a hit in light of the cost-of-living crisis, consumers are looking for more from the on-trade, in particular younger consumers. 29% of under 45s would be tempted in to the on-trade by drink tasting events, 24% with a quiz or themed cuisine evening and 18% by entertainment such as live music. Venues such as Innis & Gunn’s new venture in Glasgow will meet the consumer needs by providing them a place to socialize as well as experience and explore.
To find out more about what consumers want from the on-trade, contact PROOF.
Sources: PROOF POURtraits On-trade research September 22, Innis & Gunn, STV, Glasgow Live
Investments, Mergers & Acquisitions
Sources: Big Hospitality, Propel, Spirits Business, Drinks Business
New Drinks Product Launches & Campaigns
Sources: Drinks Business, Spirits Business