Mcmullen's, one of the UK's most prominent family-owned brewers, has issued a stark warning over its profitability prospects in light of Chancellor Rachel Reeves' tax hikes. The Hertfordshire-based company, which owned over 100 pubs before selling off 30 in January 2026, reported that it faces significant challenges due to what it describes as "brutal" tax increases implemented in successive Budgets.
The impact on the sector is severe, according to Stephen Gould, McMullen's chair. He noted that of the cash extracted from their business and received by investors, the taxman claimed approximately 95.5%. The combination of increasing demand for taxation, rising regulatory costs, and a decline in consumers' disposable income – affected by persistent above-target inflation – puts material pressure on demand and severely limits the company's ability to adjust prices sufficiently to sustain profitability.
Despite these headwinds, McMullen's reported a 9.2% rise in turnover to £134.1 million in the year ending September 2025, with pre-tax profit also seeing an increase of 18.9% over the same period. However, retail sales of draught beer declined by 16.7%, and overall volumes fell by 0.7%. Staff costs surged by over £4 million during the period, with employer National Insurance contributions alone accounting for a £780,000 increase.
Mcmullen's, which employs over 2,000 staff and operates iconic London pubs such as the Old Bank of England on Fleet Street, is set to celebrate its 200th anniversary next year. However, the milestone is overshadowed by the current economic pressures facing the company. In its annual report, McMullen's specifically targeted several tax hikes, including increased business rates and a jump in employer National Insurance contributions, as making trading more difficult.
Gould described government intervention in the sector as "damaging and, at times, irrational," adding that the short-term outlook is not encouraging unless the government alters its approach. He warned that businesses need to prepare for increasingly difficult times, asserting that current government policies conflict directly with efforts to achieve growth, create jobs, and ensure sufficient financial performance to justify continued investment.