These are exciting times for beer and pub lovers in Scotland. Breweries are springing up across the country and new investment is securing the future of traditional brands.
Meanwhile, Scotland’s pubs are also evolving, with significant investments ensuring they can adapt to meet modern customer tastes; offering top quality food and a more extensive range of non-alcoholic drinks among other changes aimed at catering to the whole family. Just this week Heineken UK announced that it is making its largest ever annual investment in Star Pubs & Bars in Scotland, investing £4.4 million during 2018 on major transformational refurbishments across the country.
The beer and pub industry is also crucial to the wider Scottish economy. Every year the sector contributes £1.73 billion to the economy, with £992m in direct taxes in the form of excise duty, VAT, business rates, employment taxes and corporation tax. Almost 60,000 jobs are dependent on beer and pubs, with around 40 per cent held by under 25s, allowing young people not just a first experience of work, but increasingly a rewarding career in brewing and hospitality.
In addition, the industry provides key financial support to Scottish sport through sponsorship and advertising from grassroots to professional level. Increasingly the industry is also sponsoring community events and festivals. Pubs and brewers are supporting the communities they serve.
It hasn’t all been good news for the sector though and it’s no secret that the industry has faced some major challenges over the last ten to 15 years.
The smoking ban; restrictions on promotions; increases in beer duty and the beer duty escalator; increases to the minimum wage and introduction of pension auto-enrolment; changes to the drink-drive limit; unprecedented increases in business rates and further regulations have all impacted economically. We don’t argue against the benefits of these policies but there has to be an acknowledgement of their impact on an industry where margins are ever tighter and survival can be a day-to-day struggle.
The recession also had a major impact on our industry, not just because people had less money but also because of the way consumer spending habits have changed.
Moreover, with beer duty among the highest in Europe – 13 times that of Germany – it is simply impossible for pubs to attract customers with lower prices, like other industries might. The realities of Brexit will also undoubtedly hit the industry with European and foreign workers making up significant proportion of our workforce. Even President Trump is impacting on the viability of running a pub, with the latest steel and aluminum tariffs affecting production costs for brewers.
The industry is up for the challenge though and we have a clear vision of what sustaining and enhancing a successful beer and pub sector in Scotland involves. Key is the continued investment we have seen from entrepreneurs, pub companies and breweries in recent years. Whilst there is always the potential for further regulation of our sector, our fear, and the fear of publicans, is that some regulation can carry unintended consequences, and risk the investment drying up. These fears aren’t unfounded, with proposals in train at Holyrood such as the Tied Pubs Bill, as well as considerations of “over-provision” at local authority level.
We must all work together to protect the pubs that lie at the heart of Scotland’s communities.
Brigid Simmonds, chief executive of the Scottish Beer and Pub Association.