(Bloomberg) -- Shares of Britain's pub operators rallied as Chancellor of the Exchequer Rishi Sunak announced lower taxes on beer in his autumn budget.
J D Wetherspoon Plc closed 5.3% higher, its biggest one-day jump in three months, while Marston's Plc added 6.3% and Mitchells & Butlers Plc 5.7%.
Sunak said alcohol would be taxed according to strength, with the main duty rate slashed. That will mean a lower duty on draft beer and cider, he added.
The planned duty change itself is minor, trimming an estimated 3 pence, or just 0.6%, off the price of a pint, according to Morgan Stanley analyst Jamie Rollo. But the move is a “welcome message of support,” he wrote in a note to clients. “After years of rising tax and regulatory burdens, this could signal a reversal of the previous mindset.”
The budget brought a double boost for the pub trade, with Sunak also announcing a 50% business rates discount for the hospitality and leisure, and retail sectors.
Rollo cautioned that while the rates relief appears material -- saving a firm like Mitchells & Butlers about 50 million pounds ($69 million) annually -- the wording around the cut was “ambiguous” and may end up being skewed to favor smaller companies.
©2021 Bloomberg L.P.
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.
