Draught pints will cost 1p less from Thursday following a cut in alcohol duty that is intended to help the sector grow.
The 1.7% tax drop on the production of draught alcohol announced in last year’s Budget is the first alcohol duty cut in a decade.
However, critics have said increases in employers’ National Insurance contributions and minimum wage rises mean pint prices will ultimately go up as pubs pass on higher costs to customers.
A relief for craft alcohol producers also comes into effect from Thursday, with both policies costing a combined £85m.
The relief applies to draught drinks below 8.5% ABV, which equates to a 1p tax cut on the average 4.58% pint.
The measure will affect three fifths of all alcoholic drinks sold in pubs, the government said.
Meanwhile, the small producer relief is for products which are below 8.5% ABV, and tapers away the more alcohol is produced.
The Society of Independent Brewers and Associates said the policies will help pubs compete against cheap alcohol sold in supermarkets.
However, critics have said the tax reliefs are not enough to counter other decisions announced by Chancellor Rachel Reeves.
From April, the minimum wage will rise by 6.7% for those aged 21 years or older to £12.21. At the same time, firms will also pay higher National Insurance contributions.
Some pub owners have said they are looking at a 30p to 40p increase on a pint because of higher employment costs.
Wetherspoons chief executive Tim Martin said in the pub chain group’s results last week that higher employment expenses will cost the firm £80m a year.
He said the measures from the Budget “have a significantly bigger impact on pub and restaurant companies than supermarkets” and accused politicians of being “dinner party goers, rather than pub goers”.
British Beer and Pub Association chief executive, Emma McClarkin, said pubs and brewers “now face an April cliff edge”.
Unions have defended the increase in minimum wage and criticised large firms of “pleading poverty” while making big profits.
The government has said the rise in employer national insurance was needed to fix the public finances.
The measures come at a time when the hospitality industry is already struggling.
Several bars, pubs, and restaurants have already said their venues are “eerily quiet” because people are not spending enough due to the cost of living.
This article was originally published at www.bbc.com
