Page last updated at 09:41 GMT, Tuesday, 27 January 2009

Brewer Adnams in profit warning

Adnams brewery
The BBPA said beer sales were down for 2008 as a whole

Brewer Adnams has warned that its 2008 profits would be "substantially" lower than 2007 due to falling sales as a result of the economic downturn.

The Suffolk-based firm said its beer sales fell 6% last year as "the seriousness of the economic decline exceeded the expectations of most".

Its warning came as the British Beer and Pub Association (BBPA) said UK beer sales saw a record fall last year.

The BBPA is calling on the government to reduce duty on beer.

Adnams warned that while trading conditions may continue to deteriorate, it was well positioned to weather the storm.

The firm is now due to publish its 2008 results at the start of April.

'Extreme pressures'

The BBPA said sales of beer from UK pubs, restaurants and shops in the last quarter of 2008 were down 8.3% from the same period in 2007.

Beer sales are sinking and many pubs are struggling to survive
BBPA chief executive Rob Hayward

It blamed part of the fall on last year's 18% rise in beer duty. The BBPA said six pubs a day were closing.

The Treasury said the higher duty was used to help fight child poverty.

The BBPA said October to December's 8.3% decline from a year before represented 2.2 million less pints of beer - be it lager, stout or ale - being bought each day.

It added that sales for 2008 as a whole were down 5.5%.

"These figures highlight the extreme economic pressures hitting Britain's beer and pub sector. Beer sales are sinking and many pubs are struggling to survive," said BBPA chief executive Rob Hayward.

"Unfortunately, government tax policy is only making a difficult situation worse."

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