Fuller's pub chain has increased the price of a pint by 15p following Chancellor Rachel Reeves' tax measures that left the company facing £8 million in additional staff costs.
Chief executive Simon Emeny revealed the Chiswick-based firm implemented the price rise at the end of March, ahead of increased employer National Insurance contributions and minimum wage rises that took effect in April.
The company, which employs 5,500 staff, was responding to the Chancellor's October Budget that raised employers' NIC rate by 1.2 percentage points to 15 per cent. The threshold for paying NI on salaries was also lowered from £9,100 to £5,000 per year.
The minimum wage for over-21s increased from £11.44 to £12.21, adding further pressure on the hospitality sector's operating costs.
The British Beer and Pub Association warned that the average price of a pint would surge past £5 for the first time due to cost pressures affecting the sector. The industry body said average prices were expected to rise by approximately 21p.
Emeny explained that Fuller's had tried to be "sensitive" with price increases, to "make sure that going to the pub remains an affordable treat". He said the group would keep its pricing "under review" over the rest of the year.
Pub's have blasted Rachel Reeves's policies due to the impact of pint prices
TREASURY/GETTY"Six months down the line and I don't think price increases are the only answer. It has to come through higher sales," he said.
The CEO noted that consumer spending would be sensitive to interest rate movements and potential increases to personal taxes.
Fuller's is pursuing a strategy beyond price increases to counter the additional costs.
The group is doubling down on investment in its bars and staff training to drive sales higher.
The company's financial results showed strong performance despite the challenging environment. Fuller's posted a 32 per cent jump in underlying pre-tax profits to £27 million for the year to March 29.
Like-for-like sales rose 5.2 per cent, with growth continuing into the first 10 weeks of the new financial year at 4.2 per cent.
Emeny emphasised that offsetting the cost impact of NIC and minimum wage increases could not be achieved through price rises alone.
Fuller's posted a 32 per cent jump in underlying pre-tax profits to £27 million for the year to March 29
PAThe focus on improving sales through enhanced customer experience and staff development represents the company's approach to managing the increased financial burden.
Fuller's also announced that chairman Michael Turner, a member of one of the founding families, will retire at the group's annual general meeting in July after 47 years with the company.
Turner will be replaced by Emeny, who will become executive chairman - the first person to take the role who is not a member of the founding families. Fred Turner will be promoted from retail director to chief operating officer.
In his final full-year results, the outgoing chairman described it as an "excellent" year despite challenging conditions.
PA IMAGESIn his final full-year results, the outgoing chairman described it as an "excellent" year despite challenging conditions.
He said: "The decisions made by the Chancellor in her October budget hit the sector hard and reduced confidence in hospitality stocks."
Turner, an outspoken critic of the NIC changes, warned: "The changes to national insurance contributions took everyone by surprise and I fear it could be terminal for a number of smaller operators in our market."
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