Beer prices are rising by a penny as tax increases announced last summer come into effect.

The hike has been called "a present for smugglers" by pub landlords who fear it will encourage people to buy cheap imported beer.

The rise rounds off a miserable festive season for pub landlords who say 1997 was their worst Christmas trading period for five years.

Tax rises announced in the post-election budget will add 1p to the cost of ordinary strength beer but premium strength brews face larger increases.

Customs officers estimate 766,000 pints are smuggled into Britain daily

The Brewers and Licensed Retailers Association spokesman, Tim Hampson, said: "It's a great New Year present for smugglers but no one else.

"No-one's raising a glass to the Chancellor of the Exchequer this New Year's Eve."

The trade predicts that the number of vans crossing the Channel to buy beer in France, where duty rates are six times less than in Britain, is likely to top 100,000 for the first time.

Customs and Excise officers estimate that 66% of the 1.3 million pints which come over the Channel a day are being brought in by organised smugglers who sell the alcohol on illegally.

The Wine and Spirit Association has warned putting up duties even further could actually reduce the amount of revenue gathered by the Treasury by fuelling even more cross-border shopping.

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