An aleing industry?

"BRITAIN'S love of beer is on the slide with sales of pints slipping by 1.5million A DAY in the past year."

The Sun, 25 January 2013

It used to be two pints of lager and a packet of crisps. Now, if The Sun is to be believed, we're losing the taste for that 'mingled cream and amber'.

The source of The Sun's figure is a press release from the British Beer and Pub Association (BBPA), which campaigns on behalf of the brewing industry. Its 'Beer Barometer' keeps track of the amount of beer that we're drinking, on a quarterly and annual basis.

The BBPA sources all of its data directly from its members, and its statistics account for "100 per cent of all beer sold in the UK". This includes the lager and ale that's sold in pubs and bars, as well as "off trade" - what we buy from supermarkets and off-licences.

However, the BBPA's latest statistical bulletin (for the fourth quarter of 2012) doesn't mention The Sun's headline figure.

What we do learn is that we consumed 138 million fewer pints of beer in the last quarter of 2012 compared to the same period in 2011. It looks like The Sun has produced an annual figure from this number (552 million fewer pints per year) and concluded that this equates to 1.5 million fewer pints of beer per day.

The BBPA provides figures for annual beer sales, from which we can see that the rate of decrease actually varied by quarter between 2011 and 2012. In other words, it's problematic to extrapolate the figure for one quarter. 

While we did drink fewer pints in every quarter of 2012, the decrease was most pronounced in the fourth quarter. This means that The Sun, by taking the figures for October to December as representative of the whole year, effectively exaggerates the fall in sales.

Quarterly Beer Sales ('000 barrels):

Source: BBPA

In total, we drained 1,325,000 fewer beer barrels in 2012. Based on the fact that there are 288 pints to every beer barrel, we can calculate that there were some 382 million fewer pints drunk last year. If, like The Sun, we want to produce a daily figure, this equates to us drinking 1,045,479 fewer pints per day. 

The Sun's figure over-estimates the daily decline in beer drinking by some 500,000 pints per day.

However, that's not to say that the BBPA don't have good cause for concern - since 2005, there has been a consistent decline in the amount of beer sold in the UK.

According to the BBPA, it's the Government's fault. While our representatives at Halitosis Hall (as Westminster is known to certain insiders) are known to enjoy their beer and ale, in his last Budget the Chancellor increased the duty on beer by 5%. 

Source: BBPA

In 2008 the Labour government introduced the "beer tax escalator". This increased alcohol duty by 6% in real terms, with the proviso that for the next four years it would rise each year by 2% above the rate of inflation.

The Chancellor at the time, Alistair Darling, noted that as people's incomes had increased, alcohol had become more affordable. His party emphasised that the aim of the policy was to raise revenue for the Exchequer, not to tackle alcohol abuse.

However, as people have seen their incomes failing to keep pace with inflation, the BBPA argues that the tax is impacting upon beer sales. While there have been signs of wavering demand since 2002 (as the graphic below shows) the most severe drop in demand has occured since the introduction of the "escalator".

However the fall between 2010 and 2011 might also have something to do with the rise in VAT (effective from January 2011), which also contributed to a rise in price.

Source: BBPA

We can't prove that the rise in beer duty is the sole cause of falling demand. While there is some correlation between the increase in the price of beer and the decrease in our consumption, it might be that we're refusing a pint not because it's expensive, but because more of us would prefer to drink something else. 

Flickr image courtesy of Chris Cotterman