Last orders: The death of the pub?

THE traditional local pub is facing an "unprecedented threat" from soaring costs and stay-at-home drinkers, experts have warned, as a new report reveals beer sales in bars have fallen to their lowest level since the Great Depression.

Figures published today by the British Beer and Pub Association (BBPA) reveal beer sales in UK pubs fell 10.6 per cent in the past year.

Some 107 million fewer pints were sold between April and June this year than in the same period last year – a fall of 1.2 million pints a day.

The news follows estimates that as many as 350 pubs have closed in Scotland in the past two years, and has brought predictions of the "death" of traditional pubs across the country.

Shrinking consumer demand as a result of the credit crunch and cheap alcohol in supermarkets, plus rising taxes and licence fees and the smoking ban, have all been blamed for the downturn in the pub trade.

Ian Brocklebank, a director of the Campaign for Real Ale (Camra), said the growing gap in the price of alcohol between pubs and supermarkets was driving an increasing number of publicans out of business.

"There's no doubt the threat faced by traditional pubs is unprecedented, and it's a threat we are taking very seriously indeed," said Mr Brocklebank.

"The big price differential between supermarkets and pubs is a massive problem. Supermarkets are able to sell alcohol at almost loss-leader prices – there's no way pubs can do that."

Camra is now lobbying Westminster to ease the financial burden on publicans to help them to tempt drinkers back.

"There are issues that we are raising with the government around beer tax and the possibility of making locally-brewed ales exempt from VAT," Mr Brocklebank said.

"There are several local campaigns to keep the traditional British pub, but what we are lacking is a national approach."

He said gloomy predictions of the death of the local pub were not wide of the mark.

"I think it's already happening for many rural communities," he said. "We are seeing the death of the traditional local in some places. When a community pub closes down, what do people end up with? A holiday home. What benefit do people get from that?"

His comments appear to be backed up by the figures. According to the BBPA, 27 pubs a week shut up shop last year. That is the equivalent of four a day and a rate of closure seven times faster than in 2006 and 14 times faster than 2005.

Figures from Camra, meanwhile, suggest that 57 pubs are closing every month. There are just over 57,000 pubs in Britain today, compared with 69,000 in 1980.

Charles Pease, the owner of the Kinloch Hotel on Mull, is threatening to relinquish his drinks licence because of soaring fees – meaning his locals could face a 24-mile round trip for a drink.

He says it will cost him thousands of pounds to meet licence costs and comply with the need for training courses and a premises plan under new licensing laws, a heavy burden for a small business.

The Scottish Government says the Licensing (Scotland) 2005 Act, which will be fully operational by autumn 2009, aims to address under-age drinking and binge drinking by introducing a detailed premises licence to existing establishments.

But Mr Pease said: "It is nothing more than a cash cow for local government and an ill-considered burden that, should recession and decline in trade be an issue, will find more than several small enterprises electing not to renew their licences in the coming months.

"The last time I renewed my licence for the Kinloch Hotel, it cost me £93 for three years. But the licence is going up from £31 a year to £220 a year, and in the first year there are additional costs, which mean the business would be paying something like £2,500 to £3,000."

Colin Wilkinson, secretary of the Scottish Licensed Trade Association (SLTA), said a multitude of factors were combining to turn the screw on pubs.

He said: "About 400 pubs have closed since the introduction of the smoking ban, but it's not just down to that. We have things like the rents, rates and fuel costs.

"But the main thing I would say is the price of alcohol in supermarkets. We have become a nation of take-home drinkers in Scotland, where we consume cheap alcohol from the big retailers. There are 759 supermarkets in Scotland, and they take 45 per cent of all alcohol sales in the country."

According to the BBPA, beer sales in supermarkets and shops are continuing to rise, with a 3.8 per cent increase compared with the same quarter last year.

Steve Mudie, president of the SLTA, added: "This is undoubtedly an extremely serious issue for the industry."

John Barclay, the secretary of Fife Licensed Trade Association, said he knew of a string of pubs that had closed in recent times.

"The price of beer in supermarkets is getting cheaper and cheaper. There's very little the pubs can do," he said.

Rob Hayward, the BBPA's chief executive, said: "Beer sales in pubs are now at their lowest level since the Great Depression of the 1930s – down seven million pints a day from the height of the market in 1979.

"We need a change of approach from the government. Brewing is a major industry, beer our national drink and pubs a treasured part of our national culture.

"Yet with further duty increases planned, the Treasury continues to see the brewing industry as a cash cow to be milked in future budgets. These falling tax revenues show that it's time for a rethink."