The head of Britain’s oldest brewer has accused the Government of draining the pub sector of cash through “bad policy” decisions, as rising costs threaten to derail growth and investment across the industry.

Jonathan Neame, chief executive of Shepherd Neame, which operates nearly 300 pubs across the south of England, said increases in labour and packaging costs had piled fresh pressure on operators at a time when the hospitality trade was already stretched.

Speaking to the PA news agency, he warned: “If you look at the cost rises we’ve faced, more than half of that is down to bad policy and that it is all sucking cash out of businesses like ours. If the Government isn’t throwing road blocks in front of pubs, we will grow and invest. The sector is full of opportunity and it is still an attractive area but decisions from Government have absolutely made things harder, and it is important to move on from recent negativity.”

The brewer pointed to higher national minimum wage levels, increased employer national insurance contributions and the new Extended Producer Responsibility (EPR) packaging tax, introduced in April, as some of the most damaging factors for the industry.

The warning comes just weeks before Chancellor Rachel Reeves sets out her autumn Budget on 26 November. The British Beer and Pub Association (BBPA) has already sounded the alarm, saying more than 2,000 pubs could be forced to close next year if further cost pressures are not addressed.

Despite the challenges, Shepherd Neame stressed it is not closing pubs and continues to invest in new sites. However, the financial strain is evident in its latest results. Pre-tax profits fell 7.9% to £6.3 million in the year to 28 June, compared with £6.8 million a year earlier. Revenues also dipped 2.7% to £164.3 million, partly due to lower beer volumes.

Retail sales remained a bright spot, rising 4.4% on a like-for-like basis. Neame said the performance showed resilience in the face of mounting costs. “Shepherd Neame is a strong business with fabulous pubs and well recognised brands. The company has delivered a solid performance against a challenging backdrop for the sector with consistent outperformance of the market in pub trading, whilst absorbing further cost inflation, in particular in labour and logistics,” he said.

Industry leaders argue that, without policy relief, the Government risks undermining one of the UK’s most iconic industries. The pub sector employs hundreds of thousands of people, generates significant tax revenue and plays a central role in many communities. Operators insist that with a stable policy environment, pubs could once again thrive.