THE price of pints is set to rise by 25p amid fears of a draught beer shortage due to a shortfall in CO2.
NightTime economy adviser to the government Sacha Lord has warned that the cost of pints is set to increase by 7%-10% when VAT increases by 7.5% from October 1.
VAT was cut from 20% to 5% in July 2020 in response to the pandemic.
However, once it ends, the average price of a pint will go up by around 25p.
Mr Lord, who has campaigned for the sector throughout the Covid-19 pandemic, warned that it could be last orders for businesses who have little-to-no cash reserves.
"The 5% VAT rate was the single biggest recovery measure for the industry over the past 18 months, and has enabled venues to stay in business and staff to keep their jobs", he said.
"Removing this relief will have a severe effect on operators across the country. VAT is the biggest expense in any business, and it is the quickest way to reduce cash flow.
"For businesses who have little-to-no cash reserves as a result of the pandemic, it could be last orders."
"Many operators will be forced to pass the increase onto the customer to stay afloat, and we could see prices across food and drink rise by as much as 7-10% from October as bosses attempt to recover losses and fight the dire financial situation they find themselves in."
It comes as a shortage in carbon dioxide is expected to hit the supply of draught pints.
The gas, manufactured in fertiliser plants, puts the fizz in our pints.
However, there are fears of a national shortage in CO2 due to two major factories closing after fuel prices increased.
It is the worst carbon dioxide shortage in 40 years.
In 2018 a CO2 shortage caused pubs across the UK to run out of fizz.
Carbon dioxide is also essential for food supplies, as it is used to preserve packaged goods for longer.
This means that British meat could run out in as soon as two weeks, unless new supplies are found.
Iceland's managing director has warned that Christmas dinners could be impacted by the supply issues, with food shortages imminent.
“This is no longer about whether or not Christmas will be okay, it’s about keeping the wheels turning and the lights on so we can actually get to Christmas", Iceland’s managing director, Richard Walker, told Radio 4.
The Government is in crisis talks to deal with the issue.
Meanwhile, the increase in fuel prices has also hit energy suppliers, with Bulb warning that it could go bust.
At the same time, a perfect storm of Brexit and the pandemic has hit the country's supply chains.
A shortfall of 100,000 HGV drivers means caused by Brexit and early retirement has led to firms offering huge wages for new truckers.
In response The Sun has launched a campaign to get Britain trucking again.
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