The price of a pint of beer could hit £10 if all inflationary costs were passed on to drinkers, the boss of a leading brewery has warned.
The warning came after the Government cut its energy bills support for the hospitality industry.
Charlene Lyons, chief executive of Black Sheep Brewery, insisted “we’ve got to be really careful about price increases”.
But she told BBC Radio 4’s Today Programme: “If we were to push all of the price increase over to the consumer, across the board, whether it be energy and everything else, input costs of raw materials… you’d be talking about over £10 a pint which is clearly not sustainable.”
The current energy support scheme for businesses is costing the Government £18billion and caps the price of electricity and gas for businesses, charities, schools and hospitals at £211 per megawatt hour and £75 per MWh until the end of March.
But from April those caps will be replaced with discounts of £19.61 per MWh for electricity and £6.97 per MWh for gas when wholesale prices breach a level of £302 per MWh for electricity and £107 per MWh for gas.
Energy intensive industries such as manufacturing will receive more generous discounts of £89.10 per MWh for electricity and £40 per MWh for gas.
While breweries will be eligible for the larger discounts, pubs and other hospitality businesses will only receive the lower level of discount, leaving a sector already battered by Covid lockdowns and strikes facing another major threat.
Mr Hunt said continuing the current scheme was unsustainable but that the new support package, which will run until next April, will provide firms with greater certainty.
Business groups and hospitality bosses have warned the new scheme will leave many smaller firms facing ruin or left with no choice but to pass on rising costs to consumers.
On its website the Government said that under the old scheme a pub that uses 16 MWh of gas and 4 MWh of electricity each month could have been given around £3,100 per month in support. Under the new scheme the same pub will get just £190 per month.
Another hospitality boss, Tayub Amjad, owner of the Zouk restaurant in Manchester, told the BBC his energy bill was set to soar by £150,000 a year when the current scheme ends.
Asked about the new Government support scheme, Ms Lyons added: “I think on balance it’s fairly disappointing. I think as a brewery we benefit because we are high level but our pubs clearly miss out massively.
“Energy prices will still absolutely soar for us and everybody else as well. You’re talking about best part of £200,000 per annum and that’s not sustainable for many businesses. including our own.”
The Government is hoping that wholesale gas prices, which surged following Vladimir Putin’s invasion of Ukraine but have already fallen below the new levels set by the Treasury, will continue to drop easing the pressure on firms and households.
Asked whether removing the new scheme would only add to inflation, which hit 10.7 per cent in November, Business Secretary Grant Shapps insisted it was more important to ensure interest rates come down, which meant reducing borrowing to subsidise businesses with energy bills.
“If you borrow that money, inflation, inflationary pressures will have to be dealt with through higher interest rates,” he told LBC. “And higher interest rates for businesses means higher borrowing costs and for costs for homes. It means higher mortgage rates.”
However, Martin McTague from the Federation of Small Businesses, said it was “crazy” to abandon smaller firms having propped them up through the winter.
“They have to have a realistic timetable in which they can adapt to the new much higher prices otherwise you are eventually leaving them to the mercy of Putin,” he said.
