THE UK’s 50 pub and bar companies grew turnover by four per cent to £11.7 billion last year, with growth driven by mergers and acquisitions (M&A) and the rising popularity of craft beer.

But the continuing growth of the sector could be hampered by rising taxes and staff shortages as a result of the Brexit vote.

Greene King’s £770 million acquisition of Spirit Pub Company was among the major deals which powered growth in the last 12 months, according to research by Ortus Secured Finance. It gave Greene King, which has had a big presence Scotland since its £187m purchase of the Belhaven brewing and pub business in 2005, an estate of more than 3,000 pubs.

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However Ortus said the growth of the UK’s top 50 pub and bar companies, which grew at more than twice the rate of economic expansion, was also boosted by growing demand for craft beer. The consultant noted that pubs can often achieve higher margins on craft beer than standard products, reporting that prices hit a record £3.58 per pint in September.

But while the top 50 firms grew last year the consultant said there are challenges which risk impeding the sector. Ortus warned the industry could be hit with a tax increase of more than £200m if the Chancellor hikes excise duty and business rates in the Autumn Budget on November 22. And it claimed operators could face staff shortages if a Brexit deal which safeguards the rights of European citizens in the UK is not secured. Ortus also cited the growing popularity of food delivery services, which are tempting more people to stay at home instead of going out to bars.

Jon Salisbury, managing director at Ortus, said: “Pubs and bars need to continue to invest in their premises to ensure they still attract large numbers of customers.”