Shepherd Neame: Pub prices to rise as Budget costs hit
UK hospitality chain Shepherd Neame, Britain’s oldest brewer, has said it will increase prices at its pubs to deal with cost pressures from the government’s tax raid on businesses.
The national living wage and employers’ national insurance contributions (NICs) will both increase from April, as announced in last October’s budget.
The increase in labour costs has “undermined business and consumer confidence in the short term”, chief executive Jonathan Neame said.
The family business, which operates 290 pubs and employs 1,600 people, estimated the annual combined price of the changes at £2.6m.
It said it would mitigate “the majority” of the costs through “price increases and cost efficiencies”.
NICs will increase from 13.8 per cent to 15 per cent in April, while the threshold at which employees’ wages are eligible for the tax will drop from £9,500 to £5,000 per year.
The threshold change, which will affect part-time workers, is the most controversial element of the policy.
The national living wage will rise by 6.7 per cent to £12.21 an hour in April.
Shepherd Neame announces half-year results
Alongside the price warning, Shepherd Neame announced its trading results for the 26 weeks ended December 28, 2024.
Revenue was £85m, down from £89m in 2024, reflecting an “increase in pub sales and a decrease in sales from premium bottled ales”, the company said.
Statutory profit before tax grew to £4.3m from £1.1m in 2024, while underlying profit before tax rose by 9.9 per cent to £4.2m.
Retail like-for-like sales rose by 4.4 per cent, driven by a 5.5 per cent rise in drink sales.
Neame said: “We have delivered a strong H1 in a challenging market.
“The additional costs imposed on our sector are most unwelcome but the business model is flexible and we can adapt to the new circumstances.
“We have an excellent pub estate and our beer business is evolving to meet current consumer tastes and trends.”