BEER prices are set to rise with the chancellor expected to announce a 3.4 per cent rise in beer duty later this month and pubs left with little choice but to pass the cost onto customers.

Fears have been raised about the future of the industry in south Essex, which employs 4,308 people and contributes £135million to the economy.

Neil Woodward, business owner of The Woodmans Arms in Thundersley, said they would have “no alternative” than increasing their beer prices in the wake of a tax increase, as they are guided by the breweries.

In light of this they are supporting a recent petition which has been set up in favour of cutting beer tax and now has more than 80,000 signatures.

A price increase is expected to impact pubs more severely than supermarkets, as many consumers are already opting for cheaper supermarket drinks and the difference in price is set to increase.

Mr Woodward said: “People are turning their back on the pub and choosing to drink at home instead.”

A survey undertaken by Britain’s Beer Alliance (BBA), an umbrella organisation for major brewers and pub companies, also revealed more than a third of people would reconsider a trip to the pub if beer prices increased.

David Cunningham, programme director of BBA, said: “Pubs already face a range of tax pressures and if the Chancellor raises beer duty as planned on October 29, pubs will feel the pinch even more.

“Seven in every ten alcoholic drinks sold in a pub is beer, so it’s easy to see how a small tax increase adds up over a year.”

David Burch, head of policy at Essex Chambers of Commerce, said: “This would be detrimental to the beer industry and to individual pubs, whether as part of a chain or not.” Mr Burch feels that this increase could lead to more pub closures at a time when pubs are already struggling with stretched margins.

He said: “This is an industry that is not as successful as people think it is.”

Statistics show that across the UK, 3.2 pubs have closed on average every day over the last two years.

BBA has forecast that even without the proposed increase to tax, pubs could continue closing at a rapid rate.

David Cunningham said: “Based on current closure rates, we estimate that within five years more than one in ten pubs in the UK will have closed for good, costing thousands of jobs. This will have a devastating effect on communities up and down the UK.”

Pubs, breweries and the beer trade combined are worth £62million to the economy in Southend and £24million in Rochford.

The industry adds £13million to economy in Castle Point and £54million in Basildon.

Mr Cunningham added: “Based on current closure rates, we estimate that within five years more than one in ten pubs in the UK will have closed for good, costing thousands of jobs.

“This will have a devastating effect on communities up and down the UK.”

J D Wetherspoon spokesman Eddie Gershon said: “There are no plans to increase prices but we will always keep our options open. Our pubs throughout Essex continue to be popular.” The budget will be announced on October 29.