Pubs have been a cornerstone of British social life for centuries. However, their continued existence is now under considerable threat, with the number of pubs in England and Wales having fallen to a record low.[1] While shifting social behaviours and global disruptions such as the covid-19 pandemic have contributed to this decline, a particularly significant factor is the burden imposed by the United Kingdom’s complex and onerous tax regime.
Publicans across the country face daily financial pressures, with taxation exerting acute pressure on already narrow profit margins. What were once thriving social and economic hubs in towns and villages have, for many operators, becomes sites of persistent financial strain. These pressures are intensified by a combination of rising business rates, increased national insurance contributions, high alcohol duties and a general tax structure that is unsustainable.
This note examines the various costs involved in operating a pub and assess how these have evolved over time. Particular attention will be given to the scope and scale of the tax burdens borne by publicans, costs which are often hidden from the consumer but have substantial implications for the viability of pubs across the country.
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Key findings
- In 2024, the average pub paid almost £100,000 per year in taxes on the sale of alcoholic drinks alone.
- As a percentage of the retail price, taxes account for 28 per cent of the average pint of beer, 23 per cent of the average pint of cider, 29 per cent of the average glass of wine and 26 per cent of the average shot of spirits.
- If the cost of a pint of beer had risen in line with the retail price index (RPI) since 1989 it would be £1.14 less than the current cost of an average pint. This means that the average Briton spends £142 more each year on pints of beer than had prices only risen in line with RPI.[2]
- If the cost of a pint of beer had risen in line with the consumer price index (CPI) since 1989 it would be £2 less than the current cost of an average pint. This means the average Briton spends £248 more each year on pints of beer than had prices only risen in line with CPI.
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[1] Toth, A., Number of pubs in England and Wales hits record low in worst year for industry since 2021, Independent, 31 December 2024, www.independent.co.uk/news/uk/home-news/pubs-closure-record-low-england-wales-b2671495.html, (accessed 1 July 2025).
[2] Evison, J, Drinking habits shift as UK changes from beer to wine, The Drinks Business, 27 November 2023, www.thedrinksbusiness.com/2023/11/drinking-habits-shift-as-uk-changes-to-wine-from-beer/ (accessed 26 June 2025).