The average cost of a pint is set to surge past £5 for the first time as the hospitality sector reacts to higher labour costs.
Pub sector experts say that prices for customers will have to increase in order to help keep venues running.
The British Beer and Pub Association said the average cost of a pint in the UK is expected to rise by around 21p as a result.
The research, commissioned alongside Frontier Economics, showed that pub firms are expecting to raise the average price of a pint from £4.80 to £5.01.
This comes amid a raft of cost increases linked to last October’s budget, which will come into force in April.
Firms will face increases to the national minimum wage, a rise in national insurance rates and a decrease in the threshold at which firms start paying out national insurance.
Business rates discounts for firms in the sector will also be cut from 75 per cent to 40 per cent from April.
The net cost of autumn budget announcements across the beer and pub sector is approximately £650 million in total, the trade body said.
It comes after historic brewer Shepherd Neame – which makes ales including Spitfire and Bishops Finger – said it will hike its beer prices in response to rising taxes.
Emma McClarkin, chief executive of the British Beer and Pub Association (BBPA), said: “The cumulative impact of these taxes and regulations is now plain to see and it is highly unfortunate that the only way many pubs can remain viable is to pass on the array of upcoming costs to consumers.
“No one wants to see the cost of an average pint increase by a further 21p and break the £5 average pint barrier that will be required for pubs to maintain their punishingly slim profit margins.
“It is more urgent than ever that Government looks at ways to cap or reduce the costs of doing business so we can keep pubs open, preserve their community value, and make sure the price of a pint remains affordable for all.”
Tim Black, associate director at Frontier Economics, said: “The beer and pub sector has shown real resilience through a tough few years – navigating the pandemic, the energy crisis, and the cost-of-living squeeze.
“But more headwinds are coming.
“The sector is at the sharp end of a wave of policy changes that will push up costs – higher wages, increased national insurance, reduced business rates relief, and new packaging rules. The cumulative impact will be significant.”