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Beer sales fell by 7.2 per cent over the last quarter, the sharpest fall in a decade as consumers tighten their belts in anticipation of a recession.

The British Beer & Pub Association (BBPA) said in total 161 million fewer pints were sold in July to September this year compared with the same period in 2007 – a fall of 1.8 million pints a day.

On-trade sales – beer sold in bars, restaurants and pubs – were worst-hit, down 8.1 per cent.

Sales in supermarkets and shops also declined, with a six per cent fall between July and September 2007, the first fall since the second quarter of 2007.

This means the Treasury is facing a £1.2 billion tax shortfall over the next three years, compared with their forecasts.

BBPA chief executive, Rob Hayward, said: "The accelerating decline in beer sales is a clear sign of a worsening economy, worried households and weakening spending.

"Sinking beer sales and the record five pubs a day closing is a barometer of the UK economic climate. Government needs to be looking to ease the constraints of the tax and regulatory burden on our sector."

The BBPA estimates the Treasury has collected £138 million less in beer duty and VAT in the six months since the Budget due to the decline in beer sales.

The association, whose members represent around 98 per cent of the beer brewed in the UK, is calling on the government to scrap its alcohol duty 'escalator', with alcohol duties set to increase by two per cent above the rate of inflation in each of the next four years.