By Matthew Scuffham
LONDON, Nov 24 (Reuters) - Britain's pub industry warned on Monday that a fresh hike in duty on alcohol by finance minister Alistair Darling had increased the risk that thousands of struggling pubs will close over the coming years.
In a prebudget report designed to stimulate flagging demand in many areas of the economy, Darling said he would offset a 2.5 percent cut in value-added tax with an increase in duty on alcohol and tobacco to ensure prices stay the same.
The British Beer and Pubs Association (BBPA), which represents the industry and has said five pubs a day are closing across the country, accused the Chancellor of "turning a deaf ear and a blind eye" to the economic plight of Britain's pubs.
Mark Hastings, the BBPA's Director of Communications, said: "It's truly staggering that struggling community pubs and brewers have been denied the tax benefit extended to the rest of the business sector through the VAT cut."
"With pubs closing at record rates and beer sales at their lowest since the Great Depression, this sector needs a stimulus just as much as the rest of the economy," he said.
The Treasury had already committed to an above-inflation alcohol duty rise in the main budget next March.
"The decision to increase tax further now, plus the looming escalator in March, will significantly increase pressures on the community pub," said Hastings.
Meanwhile, drinking lobby group, the Campaign for Real Ale (CAMRA) said Darling's decision had put thousands of pubs across the country at risk.
"The chancellor's refusal to allow beer drinkers to benefit from a VAT reduction means that 7,500 pubs could close by the end of 2012," said CAMRA Chief Executive Mike Benner.
"The government's failure to support pubs will undermine community life, ruin livelihoods and deprive people of an affordable night out a local pub," he added.
Leisure analyst Mark Brumby, of Blue Oar Securities, said the decision was a "slap in the face" for the industry.
"It's just another kick in the teeth for the people in the industry who work hard," he said.
Shares in Britain's major pub groups have been among the biggest losers over the last year as the country heads into recession. Punch Taverns and Enterprise Inns have both lost over 90 percent of their value since mid-2007.