The rising cost of beer: What happened? | BBC News — Transcript

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1. 0:00A pint of
2. 0:00beer, that's got more expensive.
3. 0:03>> It's quite extortionate.
4. 0:05>> It has gone very high.
5. 0:06>> It's not ideal.
6. 0:07>> Do some of your customers sometimes
7. 0:08complain about the price of a pint?
8. 0:11>> [laughter]
9. 0:12>> The price of a pint has gone up and up
10. 0:14and up. And by my count, there are at
11. 0:16least four main reasons why. Last year
12. 0:18in the UK, we bought 3.1 billion pints.
13. 0:22And that's about more than just getting
14. 0:23a drink.
15. 0:24>> It's a community.
16. 0:26>> Sharing with friends, enjoying life.
17. 0:28>> In the summer, we drink a lot of pints.
18. 0:31Not as much as at Christmas, but still a
19. 0:33lot. And this summer, we're buying even
20. 0:35more beer because of the World Cup. But
21. 0:38the pints that we're buying when we
22. 0:39watch the games are costing more than
23. 0:41ever before. For example, in 1990, the
24. 0:44average price of a pint of lager was
25. 0:46£1.22.
26. 0:48In 2000, it was £2. In 2010, £2.96.
27. 0:53In 2020, £3.79.
28. 0:55And in early 2025, it was £4.83.
29. 1:00The price hasn't just gone up. In recent
30. 1:02years, the rate at which it's going up
31. 1:04has increased. The British Beer and Pub
32. 1:06Association is the industry's main body.
33. 1:08We're going to use its data to help us
34. 1:10explain the story. It's looked across a
35. 1:12range of beers and estimates that the
36. 1:14average price of a pint has, for the
37. 1:16first time, gone over a fiver.
38. 1:19So, what's going on? What goes into the
39. 1:21price of a pint and why is it going up?
40. 1:24Well, it seems only right that I should
41. 1:26use one of these to explain what's
42. 1:28happening to the price of a pint. But,
43. 1:30to offer you a little more precision
44. 1:31than beer in a glass can offer, I'll
45. 1:34also be using this graphic. I want to
46. 1:36start with the cost of making the beer
47. 1:38and getting it to a pub.
48. 1:40First, there's the cost of ingredients.
49. 1:43For example, barley. UK brewers mostly
50. 1:45use British suppliers, but barley's
51. 1:47traded on a global market. And in recent
52. 1:50years, the price has gone up.
53. 1:52In the early 2020s, the pandemic
54. 1:54affected supply chain costs and the war
55. 1:56in Ukraine affected grain prices. Prices
56. 1:59have come down recently, but they're
57. 2:01still higher than they were in 2020 and
58. 2:03other ingredients like hops are an
59. 2:05issue, too. Ingredients are more
60. 2:07expensive. Next is energy. Breweries
61. 2:11[snorts] use it to heat, boil, and cool
62. 2:13beer and store it and transport it. All
63. 2:16of that requires energy and that's been
64. 2:18costing more. Again, Ukraine's played a
65. 2:20part, so is the war with Iran, but hold
66. 2:23on. Since the first year of the war in
67. 2:25Ukraine, some costs that had increased
68. 2:27have since reduced, but the price of
69. 2:30beer keeps going up.
70. 2:32>> Of course, since the peak of those
71. 2:34increases we saw in 2023-2024
72. 2:37have come down a little bit. Energy
73. 2:39costs in the sector are still 86% higher
74. 2:42than they were [music] pre-pandemic.
75. 2:45>> Okay, we've looked at ingredients and
76. 2:46energy. Staffing is also costing more,
77. 2:50not least because of national insurance.
78. 2:52This is a tax that employers pay on top
79. 2:55of staff wages. In 2024, the Labour
80. 2:58government raised it to, it said, fund
81. 3:00public services and restore economic
82. 3:02stability.
83. 3:04The trade body for the UK hospitality
84. 3:05industry called this devastating.
85. 3:08Whatever the arguments, this and other
86. 3:11factors have made staffing more
87. 3:13expensive. And if we put all the
88. 3:15breweries costs together, including
89. 3:17making and transporting the beer, this
90. 3:19accounts for over 25% of the price of a
91. 3:22pint. Something like this. The next
92. 3:25thing we have to factor in is taxes. Did
93. 3:27you know that the UK has some of the
94. 3:29highest tax on beer in the world? In
95. 3:32Germany, it works out to 4p a pint.
96. 3:36In France, it's 17p. In Greece, 26p. In
97. 3:40the UK, it's 48p.
98. 3:43This tax on beer is known as duty and
99. 3:46the whole area of duty on alcohol is
100. 3:48pretty complicated, but suffice to say
101. 3:50for a good while duty on draft beer
102. 3:53stayed the same. But recently, [music]
103. 3:56it's started to rise.
104. 3:58Let's add duty into the total. At the
105. 4:00moment, when you're getting a beer, it
106. 4:02makes up 9.6% of [music] the price. Put
107. 4:05with the breweries cost, that gets us
108. 4:07this far, but that's not the end of the
109. 4:10taxes.
110. 4:11There's also VAT, value-added tax. We
111. 4:14pay this when we buy goods and services.
112. 4:16It's 20% of the price [music] added on
113. 4:19top. It's been at that level since 2011,
114. 4:23and we pay it on beer. So, there's VAT
115. 4:25as part of the overall cost of the pint.
116. 4:28And there's more, taxes that is.
117. 4:31Business rates are a tax that pubs pay
118. 4:33to their local council. The rates
119. 4:35connect to the value of the buildings in
120. 4:37which pubs operate. The amount paid is
121. 4:40linked to what a property could rent
122. 4:42for. And in England, for example, the
123. 4:44figures used to calculate pubs business
124. 4:46rates are on course to rise, on average,
125. 4:50by around 30% this year.
126. 4:53The government's offered a rates
127. 4:54reduction to certain pubs, but even with
128. 4:56that, rates are up quite a lot in some
129. 4:59cases. And all of that feeds into the
130. 5:02price we pay at the bar.
131. 5:04As part of his bid to become Prime
132. 5:05Minister, Andy Burnham has promised to
133. 5:07reform business rates to support pubs.
134. 5:10He says they bring social benefits to
135. 5:12communities. So, as they are now,
136. 5:14business rates make up 2.2% of the price
137. 5:17of a pint.
138. 5:19Believe it or not, there are some other
139. 5:20taxes, too. Let's factor them in, as
140. 5:22well.
141. 5:23We've now explained over 57% of the
142. 5:26price of a pint. And next, we need to go
143. 5:29back to those increased staffing costs
144. 5:31and increased energy costs, because
145. 5:32they're not just affecting breweries,
146. 5:35they're affecting pubs, too, which in
147. 5:37turn affects the price that we're paying
148. 5:39for beer.
149. 5:4019.6% of the price of a pint is staffing
150. 5:44costs for pubs and venues.
151. 5:464.4% is for utilities. That's
152. 5:49electricity and water, too.
153. 5:52And there are other costs for pubs,
154. 5:54including insurance, waste disposal,
155. 5:56sports on TV.
156. 5:58Let's add those in, as well. Okay, we're
157. 6:00getting close to the full cost of a
158. 6:02pint. Ingredients, energy, staffing,
159. 6:06taxes, and other costs, too.
160. 6:08But which ones of those are really
161. 6:10pushing up the price?
162. 6:11>> Probably, in terms of the big drivers
163. 6:14for the pub, it's more the employment
164. 6:17costs and the energy costs that have
165. 6:19been the biggest challenge recently.
166. 6:21>> But there's one more thing. Profit.
167. 6:2412 pence a pint. Yes, you heard that
168. 6:26right. According to the biggest industry
169. 6:28body, 12p is the average profit made by
170. 6:31a pub on a pint.
171. 6:33And I don't know about you, but I
172. 6:34thought it would be more than that. But
173. 6:37I'm told far from it.
174. 6:39>> I think a lot of the public don't
175. 6:41realize if they see a cost of a pint for
176. 6:42£6-7,
177. 6:44they may think, "Oh, breweries are
178. 6:46making a lot of money." But brewing is
179. 6:48notoriously a small-margin
180. 6:51business.
181. 6:52>> 12p a pint in profit, it is. Which means
182. 6:55the profit makes up 2.4% of our total.
183. 6:58And if we bring all of this together, we
184. 7:01get to our average price of a pint, £5
185. 7:04and 1 pence.
186. 7:05Where you are in the country, where
187. 7:07you're buying your drinks, what kind of
188. 7:09beer you're drinking, of course, all of
189. 7:11this will affect how much you're paying
190. 7:13at the bar. But the long and the short
191. 7:15of it is that the pints this summer are
192. 7:17feeling more expensive,
193. 7:18that's because they are. And if you're
194. 7:20in the pub and someone says, "What's
195. 7:21happened to the price of a pint?" Well,
196. 7:23you could say, "Well, there's this great
197. 7:25BBC video all about this." Or you could
198. 7:27simply say, "The cost of ingredients,
199. 7:30energy, staffing, and some taxes has
200. 7:32gone up. That's what's happened." And
201. 7:35there's a concern that this cost of a
202. 7:36pint
203. 7:38is putting people off.
204. 7:39>> It's definitely a a more expensive than
205. 7:41what it was.
206. 7:42>> I think for a lot of people it's
207. 7:43definitely become prohibitive.
208. 7:44>> Well, this is how the situation was
209. 7:46described to us.
210. 7:47>> When we see this massive increase
211. 7:49happening across the sector and we see
212. 7:52breweries squeeze so much and we see
213. 7:54pubs are having to charge so much and we
214. 7:56have the public not being able to afford
215. 7:58it, you have almost a a trifecta of of
216. 8:03chaos.
217. 8:04>> A trifecta of chaos, not a phrase I've
218. 8:07used with reference to buying a pint
219. 8:09before, but the strength of that
220. 8:10language gets across that something
221. 8:13buying a drink in a pub that has been
222. 8:16for everyone now risks not being that
223. 8:19anymore.
224. 8:20In the first 3 months of 2026, 161 pubs
225. 8:23in England, Scotland and Wales have
226. 8:24closed. There's a whole range of reasons
227. 8:26for the decline in pub numbers, not
228. 8:28least according to some research, that
229. 8:30UK adults are drinking less.
230. 8:33But would lower prices make a
231. 8:35difference?
232. 8:36>> It was in a decline in the way the pub's
233. 8:38been over the years. It's Yeah, people
234. 8:40just haven't got the money no more. It's
235. 8:42you know, it's hard to say, but they
236. 8:43haven't. And years ago you used to get
237. 8:46the groups to buy
238. 8:48beer in round. Now everybody's just
239. 8:50buying individual.
240. 8:51Years ago when you used to put a pint up
241. 8:532p or 5p, now it's like 30p, 40p, you
242. 8:57know. One of them was up 50p, but you
243. 8:59have to
244. 9:01or else you go under.
245. 9:02>> How do you feel when you do it though?
246. 9:04>> I don't feel great, I've got to admit,
247. 9:06but it's something that's got to be
248. 9:07done.
249. 9:08>> Getting a drink in a pub is one of
250. 9:09life's simple pleasures, but as we've
251. 9:11seen, when we buy a pint
252. 9:13there's a whole story behind the price
253. 9:15that we're paying.